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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. |