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a. |
A person decides he wants to own a property
and works out his budget with reference to ready cash
(for example, savings), existing and foreseeable future
income and expenditure. |
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b. |
The purchaser consults his bank to obtain
a preliminary assessment of the maximum mortgage loan
he may obtain. |
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c. |
The purchaser proceeds to inspect properties
within his budget. |
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d. |
On finding a property that meets his needs
and is within his price range, the purchaser asks his
bank to conduct an initial valuation of the property to
see whether the price represents the market value of the
property and consults the bank as to whether he will be
able to obtain the mortgage loan with the repayment terms
he has in mind. |
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e. |
Having agreed with the vendor on the purchase
price and other terms (for example, completion date) in
respect of the sale and purchase of the property, the
purchaser pays the initial deposit and enters into a provisional
agreement with the vendor. |
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f. |
The purchaser appoints a solicitor to act
for him in the property transaction and to handle the
relevant documents. |
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g. |
The purchaser makes a formal application
for a mortgage loan by completing loan application forms
(indicating the desired loan amount, interest rate, tenor
of loan repayment, etc.) and supplying the bank with the
provisional agreement, his identification document, income
proof and any other documents required by the bank. |
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h. |
If the bank is not satisfied that the
purchaser will have the ability to repay the loan applied
for, the bank may require the purchaser to find someone
to provide a personal guarantee for repayment of the loan.
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i. |
The purchaser enters into the formal agreement
for Sale and Purchase and pays the further deposit in
accordance with the provisional agreement (mentioned in
(e) above). |
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j. |
After the mortgage application has been
formally approved by the bank, the bank will usually issue
a facility letter setting out the terms of the loan. |
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k. |
The bank will issue instructions to its
solicitors (who will usually be the same as the purchaser's
solicitors if the purchaser's solicitors are on
the bank's approved list of solicitors) to prepare the
relevant mortgage and other necessary documents (if any)
for execution. |
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l. |
After the bank's solicitors have approved
the vendor's title to the property, the purchaser will
attend the bank's solicitors' office at an appointed
time before the scheduled date of completion to execute
the mortgage and any other related documents (for example,
facility letter) required by the bank. If a guarantee
is required, the guarantor will have to execute the relevant
guarantee document before drawdown of the loan. The bank's
solicitors will then arrange for drawdown of the mortgage
loan in preparation for completion. |
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m. |
The purchaser has to make up the difference
between the balance of the purchase price and his mortgage
loan (if any) and pay the same together with his solicitors'
(as well as the bank's solicitors') costs and disbursements
before the scheduled time for completion. |
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n. |
The purchaser's solicitors will send the
balance of the purchase price together with the assignment
of the property executed by the purchaser to the vendor's
solicitors on the completion date. |
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o. |
The purchaser obtains the keys of the
property (if the property is sold with vacant possession)
on the completion date. |
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p. |
The vendor's solicitors will send the
assignment executed by the vendor and (if applicable)
the vendor's previous mortgage and the release thereof
to the purchaser's solicitors within a certain period
after completion undertaken by the vendor's solicitors.
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q. |
The purchaser's solicitors then send the
executed and stamped assignment, the purchaser's mortgage
and the release of the vendor's previous mortgage to the
Land Registry for registration. |
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r. |
The title deeds of the property will be
sent to the purchaser's mortgagee bank for retention after
completion of registration. |
