When buying a flat or a house, we often face many problems that keep us awake at night. However, there are several methods, the use of which will make buying a home supported by a mortgage a reason for joy, not for eternal worries.
Examine your creditworthiness and real possibilities
Sometimes a dreamer comes out of each of us. Undoubtedly, this happens when you buy your dream apartment. Often, when looking for a suitable apartment, we have precisely defined expectations regarding its size, location, room layout and quality of workmanship. Unfortunately, when talking about finances, we often experience disappointment, because it turns out that our dream apartment is out of our reach because of its high costs. Therefore, remember to start changing your apartment first of all by visiting a financial advisor who will do two very important things for us: he will indicate the maximum creditworthiness and present the amount of monthly installments and additional costs associated with the loan. In addition, the broker firm advisor will prepare a mortgage offer from several banks. It is very important – thanks to which we know how much money we can spend on buying the dream apartment. Only then can we really start looking for a suitable property, without the risk of disappointment at a later stage.
Try to collect the largest possible own contribution
Bank mortgage ads tempt you with the possibility of crediting the entire purchase of an apartment, without having to have your own previously saved money. Of course, such offers exist and there are more and more of them, and they are also better prepared. If we decide to take such a step, we have to take into account the much higher costs of credit than in the case of own payment of 20 or 40 percent of the property value.
This happens mainly for two reasons. First of all – almost every bank has higher margins that are an interest rate component, the lower the client’s financial involvement in purchasing real estate. This means that people who want to finance a purchase in whole or in large part from a loan cannot count on such conditions as a customer financing a smaller part of the purchase with such a loan.
Secondly, most banking offers require additional credit insurance in the event of insufficient or no total down payment. The most common limit here is 20 or 30 percent of the own contribution.
Get rid of unnecessary financial burdens.
Both monthly installments of currently repaid loans as well as other financial charges such as: limits on a personal account or on a credit card, company loans, alimonies, costs of maintaining children or a car are fully taken into account in banking scoring, i.e. the calculation of the maximum amount available loan. The rule is very simple here: the sum of all loan installments is subtracted from the client’s net income. However, the charges that the customer actually has are not always taken into account by the bank. For example, very often a bank accepts a fixed amount as the cost of maintaining a house or flat, most often depending on where you live. Very often this amount has little to do with actual costs, because in most cases it is much lower than actual costs (rent, utility bills, etc.). The customer’s charge of credit cards and account limits is treated similarly. Here, unfortunately, the rule is the opposite: most (but not all) banks take as their load the entire value of the maximum limit available to the client, regardless of whether this limit is actually used in its entirety or only in a small part or at all. Often, even the limit on a credit card that the customer has not activated is 100% taken as a charge.
Therefore, getting ready for a mortgage, let’s get rid of unnecessary ballast in advance. If you don’t need the credit card we have – just close it. Similarly, the limit on ROR. It is also worth considering the early repayment of small cash loans, whose monthly installments can seriously reduce our creditworthiness.
You should not be afraid of a mortgage. This is, after all, one of the foundations of the functioning of trading in a free market economy, and – so far – no one has come up with a better option for the functioning of the market. However, remember to do it wisely.