The housing loan market will continue to grow. It is legal that a large part of the total financing requirement is provided by banks in the form of mortgages. It is extremely important that we commit ourselves with due diligence for 10-20 years. That is why we have to prepare for borrowing!
Pay off your loan
According to the author of the IFL Group Financial Blog, the most important preparation before you take out a mortgage is to pay yourself the installment that you want to pay in the minimum 3 months prior to the loan.
Of course, this amount can be deducted from our current rent if we want to partially finance our loan. However, we cannot afford to cut into the unknown without proper financial preparation.
If you were to pay $ 50,000 for your loan, but you are currently paying $ 50,000 for housing, you need to be able to save $ 100,000 a month. If this fails in the test period, you have to admit that you are going to take over!
Pay off your loans on time
Many people do not think how much of an overdraft line that they never use can be a factor in mortgage borrowing. However, the bank never calculates the current status, but the total credit line.
If you have a $ 500,000 credit line, your bank will take the JTM rule as if it were fully charged and charge 5% of your total credit as a monthly installment. That is, with a $ 500 limit, you’re charged a $ 10 monthly charge.
If it is accompanied by a half million HUF credit card (similarly 5%), the monthly deduction in the eyes of the bank is already 50 000 HUF, which is equal to a mortgage loan of approximately 8 million HUF for 20 years.
Look carefully at the banks
A credit comparison page or an independent credit broker can help. With them you can really get an objective comparison, which is the basis of all decision making.
It is not at all legal for your account keeping bank to provide the best solution. However, there may be a difference of up to 10-20 thousand HUF between 1-1 offers. That is, making an unjustified, “loyal” decision can cost you millions of forints, and you pay the full amount of the loan.
Determine your total self-sufficiency
It is important to note that self-sufficiency and the available framework are not at all the same. Self-sufficiency is basically a significant part of your available free budget. Nevertheless, you need to be prepared for the expensive items that come with buying a property, such as:
- attorneys’ fees
- land registry fees
- Bank expences
- transaction costs
- unforeseen costs
As a rule of thumb, you should always keep 25-30 percent of your money, even when buying a home. Only then will you be able to safely withstand difficult times when unpaid bills arrive.
Do not change your workplace or home address
There are lots of delicate points in a borrowing you need to pay attention to. You may cause yourself unnecessary trouble by changing your home address during the application process, as this will require you to make document changes and slow down the entire process.
Even bigger is the problem if you change jobs before making a decision, as most banks expect you to work in the same job for 3 months before applying. If this defect is discovered during the application process, then the entire transaction will stop until your time is up!
As a rule of thumb, when borrowing, it is worth keeping the basic information (such as ID number) that you used to fill out the application. Plus, check the personal documents of each person involved and check the expiration date before applying to avoid being surprised by anyone on the go.
Specify the properties of the property
Most people are looking for real estate without any idea. This way they always fit the wallet in the absence of a better idea. It’s a good idea to go around that price category (for which we have money) and set up several criteria that can narrow your search.
Keep in mind that we want to make a life-long decision here for a decade. One should not confuse the “forced bargain” deriving from the financial situation with the compromise. In the former case, certain properties of the property need to be accepted because this price range fits into it. In the latter case, however, we are already in the state of mind when it comes to whatever we take, just something.
If you make a list in advance of the most important things you want to do anyway, you will surely make a better decision when looking at your home.