Regarding housing provident funds, many new professionals remain clueless about their purpose. The usage guidelines and loan eligibility criteria often leave people in the dark. Below is a workplace guide to demystify housing provident funds.
Regarding housing provident funds, many new professionals remain unfamiliar with their purpose. The specifics of how to utilize these funds and the loan eligibility criteria often leave people feeling confused. Especially with the new mortgage policies introduced at the end of September this year, how much do people truly understand? When it comes time to actually purchase a home, how should one apply for and use these funds? Regarding housing provident funds, many new professionals remain unfamiliar with their purpose. The specifics of how to utilize these funds and the loan eligibility criteria often leave people feeling confused.
I. How Property Ownership Counts
Definition of First Home
The new mortgage policy clearly defines personal property ownership: it recognizes loans, not properties. This means that after fully repaying a mortgage loan, any subsequent home purchase is treated as a first home, with a minimum interest rate of 0.7 times the benchmark rate. Specific rules are as follows:
1. If you previously purchased one home with a commercial loan that has been fully repaid,Subsequent mortgage purchases are treated as first-home purchases;
2. If the first home was purchased with cash (no mortgage), subsequent mortgage purchases are treated as first-home purchases;
3. For married couples: If one spouse owned a property pre-marriage with no outstanding mortgage, and the other had a mortgage pre-marriage but no property (property sold but mortgage still outstanding), any mortgage purchase after marriage is treated as a first-home purchase;
4.An individual previously owned two properties purchased with commercial loans, both fully repaid and sold. When taking out a loan to purchase another property, it counts as a first-time purchase (requires proof of sale for both properties).
5. An individual owns a property, but it cannot be found in the local property registration system. When purchasing another property, it can still count as a first-time purchase. As for why it cannot be found... it could be that the local area lacks the conditions for querying the property registration system, or it could be due to some other mysterious reason.
Definition of Second Home
1. If you have purchased one home with a commercial loan that remains outstanding, any subsequent home purchase with a loan is considered a second home;
2. If you have two loan-purchased homes under your name, one fully repaid and one still outstanding, any subsequent home purchase with a loan is considered a second home;
3.For married couples: If one spouse purchased a home with a commercial loan before marriage and the other with a provident fund loan before marriage, and they jointly take out a loan after marriage that remains unpaid, purchasing another home counts as a second home.
II. Interest Rate Issues for First-Home Treatment
While first-home treatment is significantly more cost-effective, banks rarely offer the full 30% discount. Moreover, the terms each bank can provide vary considerably.Rates generally hover around 10% off with additional restrictions.
III. Restrictions on Housing Provident Fund Loans
While using housing provident fund loans offers significant savings, numerous restrictions apply.