Mortgage rate to rise to prevent credit crisis!

Mortgage rate to rise to prevent credit crisis!
Sep 26, 2007 03:00
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	According to a source, the central bank may raise the interest rate of mortgage loans to 1.1 times the benchmark one-year lending rate this week. This move aims to curb the soaring house prices and speculation in the property market. On September 13, the interest rate for five years lending was raised to 7.83%. If the central bank really makes this move, the interest rate will reach 8.613%. What's more, the central bank is likey to raise the mortgage deposits to 40% for those who want to buy their second apartment, and for apartments for commercial use, the down payment will be raised to as high as 50 percent. The minimum deposit for an apartment of more than 90 sq m is currently 30 percent while for apartments less than 90 sq m it's 20 percent. Meanwhile, those commercial banks are required not to lend money to property developers who hoard land and house for speculation purposes. Why does central bank make this move, just only to curb the soaring house prices and speculations in the property market? More seriously, the central bank tries to prevent such a credit crisis which has caused great damages to US economy. Such a hit is vital. China should learn some lessons from the credit crisis outbroke in US.

Sep 26, 2007 03:00

DREAMLIFE
Points:
Join Date: Sep 5, 2007
Status: offline

According to a source, the central bank may raise the interest rate of mortgage loans to 1.1 times the benchmark one-year lending rate this week. This move aims to curb the soaring house prices and speculation in the property market.

On September 13, the interest rate for five years lending was raised to 7.83%. If the central bank really makes this move, the interest rate will reach 8.613%. What's more, the central bank is likey to raise the mortgage deposits to 40% for those who want to buy their second apartment, and for apartments for commercial use, the down payment will be raised to as high as 50 percent. The minimum deposit for an apartment of more than 90 sq m is currently 30 percent while for apartments less than 90 sq m it's 20 percent.

Meanwhile, those commercial banks are required not to lend money to property developers who hoard land and house for speculation purposes.

Why does central bank make this move, just only to curb the soaring house prices and speculations in the property market? More seriously, the central bank tries to prevent such a credit crisis which has caused great damages to US economy. Such a hit is vital. China should learn some lessons from the credit crisis outbroke in US.

Sep 26, 2007 04:23

APAULT
Points:
Join Date: Mar 11, 2006
Status: Offline

there is a lot of money sitting in bank accounts as people have been hoarding for fear of a return to the past, but now they are getting more confident they want to invest. Add to this the growing incomes of urban China and especially all the profits that are not being declared by businesses and we see there is a lot of money available to invest. The stockmarket and property are obvious investment areas.

People invest in property because they see little risk and big gains. Are they right? Probably at the moment because the number of people in each home is quite high while the space is small, and many are not high quality. So if they have the money most people would want to buy a a property. In the future youngsters will not stay at home with parents so long, and most likely more older people will wanttheir own place too (but have the relatives nearby of course).

There's not much the government can do to reduce the growing real demand, but it can at least try and keep the speculators out and maybe remove the speculative motivation for buying. Will they have much effect? Just a little, but not much as the underlying real demand is so strong.

Sep 27, 2007 04:26	#2
ICEBERG Points: Join Date: Sep 10, 2007 Status: Offline	Quote: the central bank is likey to raise the mortgage deposits to 40% for those who want to buy their second apartment. As for this point, I have a question: how can they define the second apartment? If the husband has bought a house and his wife wants to have another one, can this house be called second apartment? Anyone who knows this?

Sep 27, 2007 07:29	#3
APAULT Points: Join Date: Mar 11, 2006 Status: Offline	These are the fine details we all have to look at in new regulations and legislation. However, you can be sure that the people with money already have lawyers doing just this, trying to exploit loopholes

Jan 16, 2008 22:56	#4
GUESTNOTEDEA...	Hello, I am a private investor and have a mix of commerical and residential notes I am trying to find buyers for. Are there any services out there that will sell/broker your notes for a flat fee or low commission? Any help or suggestions would be great. Thanks, Alex Taylor

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