Mortgages and Home Loans

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1 Mortgages and Home Loans

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3 We re here to help Buying a new home may be one of the largest, long- term investments you ll ever make. Whether you are purchasing a starter home or a property as an investment, HSBC delivers a straightforward, simple solution with some very attractive benefits. When you apply for a mortgage you ll work with a Personal Banker who can answer questions and assist you with the application process. How to apply To start the mortgage application process simply call to arrange an appointment with a Personal Banker or contact your Premier Relationship Manager directly. Preparing for your mortgage When you apply for a mortgage there are additional fees which you need to anticipate. These include legal fees, negotiation fees, a property appraisal fee and stamp duty.

4 Visit us online You can visit our website at and try our online mortgage calculator to better understand your monthly mortgage payments.

5 Mortgages A mortgage from HSBC can be tailored to fit your needs and your financial situation. You will benefit from: One-on-one assistance and guidance from a Personal Banker or Premier Relationship Manager A pre-approval letter for a mortgage so you ll know your price range Flexible financing terms Residential Mortgages If you are interested in purchasing a property to rent or to live in, a residential mortgage is a smart solution. 80 per cent financing for properties valued up to BM$1.5 million 75 per cent financing for properties valued between BM$1.5-2 million 70 per cent financing for properties valued between BM$2-5 million 60 per cent financing for properties valued over BM$5 million Maximum term of 30 years Construction Loans With a Construction Loan we can help you build your dream home. Please review the document checklist at the back of this guide to ensure that you have all the documents you need to apply. You should have 10% of project costs plus 5% for cost overruns before you apply for a Construction Loan from HSBC. Please arrange an appointment with a Personal Banker or Premier Relationship Manager to find out more.

6 A Step-by-Step Guide to Purchase a New Home * Get Pre -Approved Review your finances to ensure you have the necessary funds to cover your down payment and all other associated mortgage costs. Review the document checklist at the back of this guide to ensure that you have all the documents you need to apply. Meet with an HSBC Personal Banker or Premier Relationship Manager for help in applying for mortgage preapproval. Once pre-approved HSBC will send you a pre-approval letter valid for 90 days setting out how much you can borrow so you know what you can afford. This will help you to find the best options for you and to focus your home search. If you haven t already done so, fulfill all conditions set out in your pre-approval letter so that you can get final approval. Secure Your Purchase When you ve found a property and made an offer subject to financing, contact your Personal Banker or Premier Relationship Manager and provide the details. Provide the Personal Banker or Premier Relationship Manager with a copy of the Sales and Purchase Agreement. Secure the purchase with the required deposit. Get Formal Credit Approval Your Personal Banker or Premier Relationship Manager will arrange to have the property professionally appraised to confirm its value. Your Personal Banker will notify you of your formal approval. Pre-Closing Meet with your lawyer for pre-closing. Your Personal Banker or Premier Relationship Manager will help you to arrange home buildings, home contents or mortgage protection insurance to protect your investment. HSBC will send instructions to your lawyer who will then complete the closing documents which you will be asked to review and sign. HSBC will provide you with a letter confirming all the details of your mortgage. Closing Your lawyer will send the closing documents to HSBC. HSBC will arrange to have the funds sent to your lawyer who will complete the purchase. Start enjoying your new home! * These steps are for informational purposes only and may vary for each customer based on individual financial circumstances. A mortgage is subject to formal credit approval with HSBC.

7 Home Loans A Home Equity Loan or a Home Equity Line of Credit enables you to use the equity in your property to borrow funds for home renovations or other major purchases. You will benefit from: One-on-one assistance from a Personal Banker or Premier Relationship Manager who can help you to decide on the best home equity option for you Monthly payments conveniently separated from your mortgage payments Home Equity Loan A Home Equity Loan is a variable rate loan with a fixed payment schedule that uses your home as collateral. Minimum borrowing of BM$30,000 Monthly principal and interest payments Borrow up to 80 per cent of the available equity in your home Terms up to 30 years Home Equity Line of Credit A Home Equity Line of Credit is a revolving line of credit that uses your home as collateral. Minimum borrowing of BM$30,000 interest charged monthly but only on the funds used Borrow up to 60 per cent of the available equity in your home up to a maximum of BM$150,000 Interest charged monthly but only on the funds used Terms up to five years

8 Insurance A mortgage is a very large financial commitment, and it makes sense to protect your investment. HSBC offers a wide range of insurance solutions to cover your assets should the unexpected happen. Mortgage Protection Insurance To help ensure that your family is not burdened by debt in the event of your death, Mortgage Protection Insurance is an added benefit for new and existing mortgage customers. Pays off your mortgage upon the death of the insured Provides coverage up to BM$1 million with a maximum benefit of BM$2 million. Flexible payment options - premiums can be paid monthly or annually Home Buildings Insurance As a home owner, you need to protect your most precious asset - your home. Home Buildings Insurance provides coverage for structural damages to your property resulting from unexpected events such as hurricanes, storms and floods. This insurance also provides additional coverage for: Loss of rent and alternative accommodation Accidental damages Property owner s liability* Home Contents Insurance Replacing the contents of your home could cost thousands of dollars. Safeguard your possessions and your peace of mind with Home Contents Insurance to: Protect the contents of your home, garage and other buildings on your property Additional coverage to protect contents which are taken out of your home while in Bermuda or overseas For more information on insurance solutions call SAFE (7233) or visit *Subject to exclusions HSBC Bank Bermuda Limited is acting solely as an insurance agent of BF&M pursuant to it insurance agent s license by the Bermuda Monetary Authority and accepts no responsibility for the underwriting, administering and claims handling of insurance products. HSBC Insurance is the brand name for insurance products offered by HSBC Group members.

9 What you should consider before you take out a mortgage Appraisal As part of your application for a mortgage, HSBC will conduct an independent real estate appraisal by a qualified real estate appraiser. An appraisal is required when you ask to use a home or other real estate as security for a loan. The appraisal will create an estimate of the fair market value of a property. Credit History We will complete an analysis of your personal financial information to determine the maximum funds you can borrow. It is important to maintain a clean credit history to ensure that you receive the funds you need. Costs There are costs you will need to anticipate when you apply for and receive a mortgage. These include legal fees, a negotiation fee, a property appraisal fee and stamp duty. These costs typically amount to about 5-10 per cent of the mortgage. Your lawyer can provide additional information. Down Payment Your down payment is the portion of your home purchase price that you pay up-front yourself. The amount of your down payment (which represents your financial stake in your new home) should be determined before you start your property search. Debt Service Ratio A term we use during the mortgage application process, the debt service ratio is the ratio of your fixed expenses to your income and will help determine if you can make your mortgage payments comfortably. Documents Required When you apply for a mortgage, you will be asked for details and evidence of your monthly salary as well as other information. You will find a complete list in this guide. New Customers If you do not already have one, you will need to establish an HSBC bank account to obtain a mortgage with us. This can be done as part of the mortgage application process.

10 Document Checklist When you re ready to apply for a mortgage or a home loan you will need to present the following documents: Letter or contract from current employer and pay stubs/statements to verify income If self-employed/ business owner - Payroll Tax Returns from within the last 12 months or 2 years financial statements Valid photo identification (passport, Bermuda drivers license) Copy of rental agreement if rental income is being received and statements to verify income is being received Please consult your lawyer to ensure that you are compliant with the Bermuda Immigration and Protection Act 1954 (as amended) If you are applying for a construction loan you will also need to present the following documents: Copy of approved plans Three quotes from reputable contractors Cost estimate/quantity survey from a qualified surveyor Agreement/Contract to verify drawdowns Before disbursement of a Mortgage the following documents will be needed: Signed Sales and Purchase agreement Copy of Home Insurance policy With HSBC, it s easy to apply for a mortgage or a home loan, and get expert advice you can trust. Call to arrange an appointment with a Personal Banker or Premier Relationship Manager Visit for more information.

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12 HSBC Bank Bermuda Limited, 6 Front Street, Hamilton HM 11 Bermuda January 2013 HSBC Bank Bermuda Limited. All rights reserved. Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority. Issued by HSBC Bank Bermuda Limited, which is acting solely as an insurance agent of BF&M pursuant to its insurance agent s license issued by the Bermuda Monetary Authority and accepts no responsibility for the underwriting, administering and claims handling of insurance products. HSBC Insurance is the brand name for insurance products offered by HSBC Group members. Terms and conditions apply. Printed in Bermuda on recycled content and FSC Certified paper.