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Homebuyers Cheer 'Zero Payment'
Dreams of buying a home are coming true in East China's Jiangsu Province as a new type of housing loan was recently offered in Wuxi.
Offered by the China Construction Bank's Wuxi branch, the loan is called a "zero payment" housing loan. Buyers can get a bank loan for 20-30 per cent of the total cost of the house to make down payment by mortgaging their future or present home.
In the past, homebuyers had to pay a 30 per cent down payment in cash when buying a new house. This has prevented many people from fulfilling their dreams of buying their own home because they do not have enough ready cash.
"It has become much easier for ordinary people to have a house of their own with the implementation of this new policy," said the head of the branch bank's housing loan section.
A number of people have bought houses with the loan's help since it was introduced.
"It is really a good thing for people like me who want to improve their living and working condition, yet don't have such a big amount of ready money in hand," said one university teacher who bought a 100-square-metre house with the loan.
The teacher said she will pay back the loan in 10 years with a monthly payment of a little over 1,000 yuan (US$120).
To qualify for the loan, the total price of the house has to be less than 150,000 yuan (US$18,000) and the money must be paid back in no more than 30 years.
"Zero payment is like a buffer between consumers and real estate companies in that it lessens the financial pressures on the buyer and enables more people to own houses," said Gao Bo, a professor of economics in Nanjing University, who added that this new policy will enhance the real estate business.
The bank is reportedly the first financial institution in Jiangsu Province to offer such a housing loan.
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