What is EF (end financing)
When you purchase a new project property, usually EF this words will suddenly buzz into your awareness hearing from Mortgage consultant/ broker or property agent. So what is EF stands for and what does it mean?
What does EF stands for?
It stands for End financing in short, or banks that gives financing to the borrower for this specific project. When you purchase new property from xxx developer on xxx project, they will introduce you to ABC bank for financing, however, when you ask them what about your favorite bank EFG, whether they can finance me the loan? They might answer you EF haven’t approved yet and in the midst of processing as project panel.
EF is very important for the survival of a project.
Without bank loan to consumer, developer couldn’t sell their units out to the consumer market and lead to project abandoned and bankrupt. The amount of banks EF is important too, different bank has different guideline in approving loan, so the more banks EF the project, the more choices borrower would have.
What does it mean when certain project have 4 banks EF and the other project have 12 banks EF.
Bank is a simple minded capitalist business corporate institute, their motive in giving EF is to lend money to the consumer and earn their interest. Moreover, banks wouldn’t simply EF every projects at near sight.
Banks will do their due diligence on the developer financial statement, whether they have enough capital and low gearing in completing this project well, whether the property type, densities, unit design, location has good resale value in the future. Bank would finance the property only if it’s a good value property.
They mitigate risk of property depreciate in the future that causes NPL(non performing loan) occurred from this project.
If you read between the lines well, you would have already guess why. The more EF a project received, it means the project is really a good catch. A simple gauge for investor in the future.