WHETHER buying in Hong Kong or abroad, when looking for a mortgage always look for or ask your mortgage broker just what the annual percentage rate (APR) is.
By doing so, a potential mortgage owner can avoid unexpected charges.
It may seem appealing to get that special advertised deal of 'incredible 3.9 per cent financing' when buying a home, but are these the real rates? More importantly, what will be the amount you will be signing up for when it comes to paying your mortgage? If you borrow X amount of dollars, you can not take the claim that the stated interest rate is equivalent to the real cost of borrowing.
Many times a person will see a bank offering mortgages of 6.9 per cent financing, for example, and believe the terms are attractive compared with, say, another financial institution offering 7.5 per cent.
There are many ways a bank or a lender can charge and collect interest.
A variety of different payment plans - daily, weekly, monthly, semi-annually, yearly, in advance and in arrears - ensures that a bank or a lender gets its return. While banks and lenders in Australia, Britain, Canada, New Zealand and the United States are required by law to state what the APR is, in Hong Kong the requirement is only optional.
