Funding Your Home Purchase

If you decide to purchase your own home, start planning for it now. You need to get your finances in order, save for a down payment and mentally prepare for the responsibility of owning a home.

Down Payment
The down payment is usually expressed as a percentage of the price of the property. For example, a HK$600,000 down payment on a HK$2 million apartment would be a 30 percent down payment.

No matter how much you need for a down payment, save more. There are a lot of fees included with buying a property and you will be in much better financial shape when you move in if you have given yourself a little padding.

Decide how much you want to spend on a home and how much you will need to save for a down payment. Saving a reasonable amount every month, you can compute a target date when you will have your down payment and start your home shopping.

Check Your Credit Report
Maintaining a healthy credit report is an important part of financial fitness at all stages in life. But it is especially important when you are ready to buy a home. Financial institutions will review your consumer credit data to decide whether you qualify for a mortgage and the interest rate you will need to pay. So while you are taking the time to save money for a down payment, take some time to monitor your credit data through a credit reference agency.

If you have poor debt ratios, meaning too much debt compared to your income, start paying down your debt. That is not an easy thing to do. But it is crucial in enhancing your credit and getting favorable interest rates.

Estimating Your Mortgage Costs
Before you purchase a property, it is helpful to work out how much financing you could obtain. Many banks provide online mortgage tools to calculate approximately how much you may borrow, based on your income and finances. Using these tools, you can have an estimate of how much your monthly repayment will be for a given size and type of mortgage.