Buying real estate for a loan in practice looks different than you can imagine. In fact, the mortgage is the last thing you do in this case, which is why I am presenting a general description of the next stages. Remember that the order is not arbitrary, and the execution of all stages is a necessity, not a goodwill.
First check the creditworthiness
It seems logical – if you are planning to buy a property for a loan, first you need to know if you have creditworthiness at all. The idea is to get to know financial opportunities before you choose a flat or a house. Many people make a mistake and work the other way round – if you manage to get a good idea of buying a particular apartment, and later you will find that the bank will not lend you money, then the disappointment will be double, and completely unnecessary. It’s like going out to the store normally – you will not clog the basket until you know how much you have in your wallet.
Look for real estate
Of course, the initial estimation of creditworthiness gives very rough results, but it allows you to look for some interesting property, which should be done further. Also, remember that the creditworthiness you calculated at the beginning is not the amount that you can spend on buying a flat. Along the way, there are acquisitions, fees, downpayments, payments and other costs that can sometimes be covered by a loan, and sometimes not – this is a serious difficulty, but we are talking about amounts of 4-8% of the real estate’s value.
Investigate your home
The property found should be carefully verified. On the one hand, it is about things as prosaic as the quality of finishing, especially important on the secondary market, where the defects are more frequent, but at this point it is also about verifying the entries in the land and mortgage registers or checking the real estate mortgage charges. In any case, the responsibility for verification rests with the buyer, but it is simpler on the primary market, that the developer must prepare all necessary materials, and such an obligation is not available to the owner who sells the flat on the secondary market.
If, for various reasons, the final contract can not be immediately signed, then a preliminary contract is signed, which is in essence an obligation to conclude a purchase and sale agreement. It is necessary, for example, to apply for a housing loan, but it also occurs when you buy a property during construction. Such an agreement shall be made in writing or in the form of a notarial deed, where the latter option gives rise to some further legal consequences in the event of non-compliance with the contract, but it is of little importance for the loan application.
Offer and application
After reviewing the offers of banks, you can submit a loan application. Remember that at this stage you can negotiate with many banks and finalize only one application. The very procedure of applying for a mortgage binding becomes only when you sign a loan agreement. Of course, there is no need to complicate your life – 3 or 4 applications will certainly suffice. After the acceptance of the application, it is only necessary to complete the formalities in the selected bank. It will not be difficult because each bank prepares clear instructions on how to finalize the loan application. Only after you start the loan, you can take over the property that will become your property when you pay the last installment of the mortgage. Simple? I hope it was simpler than it was when you started reading this article.