《finance project (final)》.ppt

counsel fee(律師費): almost about $5000 Early Payout Penalty(罰款): It is a fee that you pay off the mortgage earlier than the period of penalty Cause the interest loss to bank You need to compensate for the bank the period of penalty 1-3 year HSBC: 3year year1=3% year 2=2% year 3=1% 1st:1500000x3%=$45000 TC=$50000 2nd:1500000x2%=$30000 TC=$35000 3rd:1500000x1%=$15000 TC=$20000 If you pay off the mortgage after the 3 years, you don’t pay the penalty You just need to pay the counsel fee. Cost of switch Refinancing(加按套現) Increase your mortgage balance through redoing a new mortgage in order to get cash. Reason? Getting the cash for investment in other items with higher return. According to the market value of your property, banks lend a new mortgage (70% of the market value) to you. Refinancing = Market Value x 70% - Mortgage Balance Refinancing rate is higher than primary mortgage rate. Maximal 6 years payment period MV Refinancing Refinancing(加按套現) Bank requirement Most banks just lend loan to the clients. Monthly payment not 50% of their monthly income Some banks also require: The refinancing money can cover the whole clients’ loan. After meeting the above requirement, we can refinance. Refinancing(加按套現) Example Mr. Chan monthly income : $30,000 mortgage balance : $1,000,000 market price of property: $2,000,000 Refinancing formula: market value x 70% - mortgage balance 2,000,000 x 70% - 1,000,000 = $ 400,000 Therefore he can get cash $400,000 Monthly payment (assume that 5 years, HSBC:P-2.1%=2.9%) $400,000 = M {1-(1+2.9%) -60} / 2.9% M = $14,145 Refinancing(加按套現) Conclusion 1. Mortgage loan i. Amortizing loan ii. Help let buyers buy a propert