Changing the environment always has a positive impact on our lives. Are we dreaming of buying a house? Would we like to build it from scratch? How about changing our current home beyond recognition? Credits will come to our aid.
The house of our dreams
Dreams of a new home or a thorough renovation of an old one are not the cheapest, but we do not have to give them up if we do not have enough cash at hand. Banks have a wide range of real estate loans. Check out what you need to know before taking out a loan that will help you create your dream home.
Primary and secondary markets for real estate
If we would like to make a radical change in life and live in a completely new place, and at the same time be its owners, we can think from buying a house or building it from scratch. The property can be purchased on two types of markets - primary and secondary markets.
The primary market includes new houses and flats sold by developers. On the secondary market we can buy houses already in use by previous owners. The option of the primary market involves a much larger number of formalities - the bank will require an extract from the land and mortgage register, preliminary agreement, registration documents of the developer's business activity, a building permit or building occupancy permit and an extract from the land and mortgage register.
If you are buying a house from the secondary market, you will need to provide the bank with a copy of the land and mortgage register, a document confirming the right to the property of the previous owner, a preliminary agreement and a valuation of the property prepared by an expert. Regardless of which market you choose, you can apply for a mortgage in both cases.
Mortgage loan - what is it?
All loans to buy a property are called mortgages. Their essence is that the security of repayment of liabilities towards the bank is the so-called mortgage, i.e. a limited property right of the borrower on the real estate. In other words, if the customer does not repay the loan, the bank can take over the property purchased or built with the borrowed money. But don't worry, it's only the last resort - if we pay our debts in accordance with the agreement, nobody will take away our dream outlet. Obtaining a mortgage is not difficult, but there are a number of conditions that need to be met.
Own contribution - what is it?
In the past, there have already been credit offers where the bank offered loans to customers for amounts above 100 percent of the value of the property, i.e. where the funds were sufficient not only to buy a house, but also to make some additional investments. At present, banks require in each case their own contribution to the purchase of real estate. From this year onwards, the percentage rate of own contribution shall be 20 per cent. This condition, unfortunately, significantly limits the possibilities of some potential customers.
Credit for building a house - what do you need to know?
Slightly different than in the case of buying a finished house or flat, the procedure of obtaining a loan for the construction of a house from scratch looks different. In order to think about such a loan at all, we must first purchase a building plot on which we can build our dream house. We will also have to design it ourselves or with the help of an architect.
If we manage to meet these two conditions, we can go to the bank for a loan. However, we will have to estimate the construction costs and provide an accurate cost estimate with the construction work already carried out, which has been taken into account. In order to be able to obtain a loan, we must also enter the mortgage of the bank into the land and mortgage register of our plot. We should also remember that after the completion of the construction works we will have to document all construction works and settle the accounts with the bank.
Repair on credit? It's possible
If we want to change something in our surroundings, but do not want to leave our existing socket, maybe we should think about renovation. It's a much less expensive change than building or buying a new home. Unfortunately, it is also much more difficult to obtain a loan for it.
Most banks do not offer loans for house renovation at all. Doesn't mean we can't take out a loan for that purpose. It is possible to obtain a mortgage for renovation if the investments require significant financial outlays. The procedure for obtaining it does not differ from the one applied to the loan for building a house. However, we must be the owners of the property and it must not be mortgaged.
When the cash loan, when the mortgage?
If you want to apply for a mortgage, you should be patient - you can wait up to a month for a decision on a possible loan from the bank. If our house needs urgent renovation and its cost does not look too high, we can look for simpler ways to get cash. The easiest way to get the money to renovate your home is by simply using a standard cash loan. Getting it is much easier than getting a mortgage.
We do not have to present documents to the mountain bank, although we will have to prove our creditworthiness. If you don't have that ability, a quick loan may be the solution.
Make your dreams of a new home come true
Owning a completely new house or a complete renovation of the current one is a dream come true, even if we do not have enough cash at the moment. With help can come credit, and we have at our disposal several types of loans for real estate. It is worth to think about which mortgage is the most suitable for our expectations and choose the one that suits you best.
- June 26, 2019
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