| China's residential construction has been growing with leaps and bounds in recent years. The residential construction in China has been in a period of constant growth and housing has become the focus of consumption. To stimulate housing consumption needs systematic efforts, of which providing finance for housing will play a vital role. For a long time, the major sources of home finance are coming from home mortgage loans and housing mutual funds. Home mortgage has become the mainstay of consumption products provided by China's commercial banks. Under the strict supervision of China's central bank and with controlled interest rates, there are apparent similarities in home financing, such as the ratio of down payment, interest rates, repayment of mortgage loans, etc. For home mortgage consumers, there is no essential difference in choosing services from different commercial banks of China, thus the personalized market demand is hardly met. America has established the most sophisticated home financing system in the world. After decades of fast growth, Americans have accumulated a lot of experiences and formed a complete and efficient home financing system which basically represents the trend of home financing in market economy. The successful government intervention, market pattern, operational mechanism and mortgage products and services in America have been copied by many developed and developing countries . In US, not only have the interest rates and ratio of down payment been carefully designed according to customer divisions, but also the conditions for granting loans have been differentiated with regard to customers' residential areas. Even the home loan services of the same type provided by different banking corporations show distinctive characteristics. Certainly, what has been done successfully in other countries can be copied with an aim to improveour banking services. With the purpose to address the problem of over-simplified home mortgages of China's commercial banks. This paper compares the differences in the product designs between America and China, and attempts to find ways to improve China's home mortgage designs by learning the successful experiences of US banks. The major content of the four chapters of this paper is as follows:Chapter One describes the development of home mortgage loans in China and other counties. The main topics in this chapter include: the concept of home mortgage loan, its classification and characteristics; the history of home mortgage loan in some developed countries, using the US as the major example; a concise summary of development in China's home mortgage loans and its problems.Chapter Two lays an emphasis on the product design of home mortgage loan in America. The first two parts of this chapter discuss the management, business patterns of home mortgage loans in the US, in which personal credit rating system, loan ceilings, credit collateral and insurance, varieties of mortgages, loan-backed security issuance, loan repayment, fixed-rate loans, adjustable-rate loans, graduated-payment mortgage, shared-appreciation mortgage are analyzed in detail. In the third part, I discuss the differences in interest rates, fees, down payment, repayment and maturity of the 30-year-fixed-rate mortgage, 15-year-fixed-rate mortgage, and 7/1, 5/1, 3/1 adjustable-rate mortgage, using the examples of Citibank, by charts and text.Chapter Three discusses the design of home mortgage products under current situations in China. At first, This paper summarizes the development and patterns of China's home mortgage, introducing the new-house mortgage of commercial home loans and the housing-mutual-fund-backed mortgage of policy-oriented home loans. In the third part, I use the home-mortgage products of the Bank of Construction of China as an example to illustrate the common operationalprocedures and mortgage requirements in China. After a careful comparison of the mortgage products between China and the US, the weaknesses of the mortgage design of China have been discu... |
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