Credit firms muscling in on mortgages

Local financial credit firms are aggressively tapping into the home mortgage business, offering similar lending rates as banks - or even undercutting them - despite the lackluster property market.迷你倉 For example, Pan Asian Mortgage is offering loans at prime, currently 5.25 percent, minus 3.1 percent, for the entire loan period of up to 30 years. In a recent promotion for a new residential project, Hitachi Capital dangled a three-year fixed rate of 2.25 percent, with loans of up to 90 percent of the property value. One credit firm executive said that as the Hong Kong Monetary Authority has applied tougher measures on mortgage lending, more customers do not qualify for bank loans. Therefore, they become prime targets for the credit firms. Also, as t儲存e bad debt ratio of mortgage loans is low, and cases of foreclosure rare, the credit companies find the market attractive. Furthermore, as the current interest rates are low, this allows the firms to obtain capital at low cost for lending. One actuary said part of the capital comes from Japanese and other foreign financial institutions. Gorman Kwong Chi-fai, chairman of the Hong Kong Chamber of Professional Property Consultants, said demand for mortgages is huge. He also stated that among the nearly 1,000 financial credit companies in Hong Kong, those engaging in mortgage business mainly offer second mortgages with loan amounts of HK$1 million to HK$2 million, for a period of six months, at annual interest rate of about 20 percent. STAFF REPORTER 新蒲崗迷你倉