Real Estate Loan? One of the most serious questions in life
There are a number of mortgage offers to buy real estate, but which offer is the most advantageous? Do we have to choose a mortgage or is there another solution?
Housing prices are still rising. What is good for sellers is not beneficial for buyers. The price per square meter in the best locations is almost unpalatable. It is very difficult to find the best house or apartment and when we have found the right one, we have to act quickly, or someone else can buy it sooner. However, in Central Europe we still prefer our own apartment. Those who are considering buying are not in a simple situation.
When buying, we also have to compete with investors who do not buy property for their own home, but want to rent it or earn even more with, for example, airbnb. They usually buy in cash, so if we don’t have the necessary finances at hand, we don’t have a chance against them. But how to proceed if we need to finance part of the price from some step source?
The mortgage loan application is slower
There is no longer a bank that does not offer a mortgage loan. However, the conditions of banks may vary greatly. We care about how much we will have to pay for the loan. A properly selected loan can be paid out in several respects.
Purpose Loan or Mortgage?
In order to make the right choices, we need to be very thorough about borrowing and mortgage loans. Both types offer us several advantages, but also disadvantages. Most important, however, is what conditions we can accept.
What do we need to know about mortgage loans for housing?
Banks offer credit to buy real estate. This means that we can only make a purchase transaction from this amount. We need to find other resources for less or more reconstruction. The property purchased will be the security of the loan itself. So we can use the credit for:
- purchase a new or used apartment / house
- construction of a new apartment / house
- consolidate an older, disadvantageous mortgage loan.
If we apply for a housing loan, we will have to meet many conditions of a financial institution. Much more than when applying for a Personal Payday loan.
These criteria must be met in order for the mortgage loan application to be approved:
Mortgages usually represent a much higher amount than conventional loans.
Therefore, the approval process is much longer. The purpose of these two loans is different. Applicants must meet stricter criteria than when applying for a loan.
- We cannot be negative registry listing. None of the banks will provide a housing loan if we are a bad debtor. In any case, they will ask that we involve a co-debtor.
- We must be employed indefinitely and for at least 3 months. The bank will calculate what maximum monthly payment it can offer to us based on our confirmed earnings. He or she with a maturity combination determines what maximum amount we can receive from the bank.
- Own resources. Banks require that we have a certain amount of our own funds when buying. The percentage – or height – depends on the financial institution.
- Coverage. Since we are repaying mortgages for many years, the bank cannot rely on our monthly income and therefore needs a security. This is the property we buy.
- Inability to pay insurance. Usually, it is not compulsory, but for long repayment periods, each bank recommends that we take out insurance against default. We can also lose work suddenly.
Why can a non-purpose loan be a better solution for buying a property?
There are providers that offer us up to EUR 50,000, and we don’t even need to specify the purpose of use. These loans can be enough for those who have a larger part of the total property price. In which cases is it worthwhile to supplement the purchase amount with a loan instead of a mortgage loan? Here are some of these cases:
- if we don’t want another one to buy the dream house and want the money fast
- if we need less than 50,000 euros – maximum amount of no-purpose loan
- if we have a high enough income to pay for relatively higher installments.
We can get special-purpose loans today under very advantageous conditions, for about 6% RPMN. If time is an important parameter, it seems worthwhile to solve the question with a Personal Payday loan. It is necessary to calculate whether it is worth choosing a mortgage under better conditions or further searching for a suitable property.
- repayment period
- financial institution
- interest rate
- loan application