Getting the key of your apartment for the first time can be a priceless dream. Having the song itself creates a very similar feeling. Organize furniture, colors, lights. Leaving everything in the way you like is one of the greatest goals of the human being.
But on the other hand, in times of crisis and lack of money , is there any alternative way of having one’s house without having to go into long financings?
In fact, in this purchase option, usually, the consumer will pay the value of the property doubled or tripled, when it is not.
The big question is how to prepare to face the moment and choose the best way to raise enough money to at least give a good entrance in your financing.
All care is short on making such a large debt, and having a letter (money) up your sleeve is essential to letting you sleep more peacefully at night.
We separate the main doubts of people who think about financing a property . They are questions answered, comments, affirmations, projections, simulations and everything else that involves the purchase of a property, either in the plan, or ready, for the future.
Check out each of the topics before Financing the Property. As a lame person it can help you but it’s preferable to hire a Financial Planner in Washington DC . Note, however, that there is no right or wrong and we are not telling you to stop buying, but at the very least be sensible enough to take all of these points into consideration.
1 – Take into account the risk of losing money with real estate
Currently, according to informal information, 80% of borrowers lose money on financed properties and the main reason is the lack of financial planning.
In the end, only 4% of US people think about the future and make the ideal time table so that the dream is actually fulfilled and does not turn into an eternal headache.
2 – Financing the Property is Your Best Option
Leave the pen still in the bag and do not sign. Ask yourself: “Financing is the Best Option”? Put all the values in the pencil account and add the accumulated until the end, in the last installment.
Understand, too, what is the Total Effective Cost (TSC) of the funding. Report interest and fees, taking into account that they should not be abusive.
3 – Understand How Real Estate Financing Works
The Real Estate Financing allows the consumer to pay the property in several installments, which can be extended for years and with interest, considered, facilitated.
Banks make programs based on the profile of each buyer, taking into account the conditions of payment, minimum values, interest rates, minimum payment terms, type of property, credit limit and additional costs.
To get an idea, in a public bank, there is the possibility of financing a property through many different financing programs , where families can only have maximum incomes of 5 thousand reais and real estate can not exceed 230 thousand reais, among others features.
The real estate market goes through its ups and downs every year. That’s due to the fact that the mortgage crisis took place not too long ago. In fact, more and more people are becoming risk-aware when it comes to investing into the real estate market. Read more
4 – Observe the Requirements to Finance a Property
At the time of obtaining the approval, it is necessary to present several personal documents like (Proof of Residency and Income). In addition to other requirements such as receipts, decorations, etc.
And the bank will make a great analysis of your person and your situation in the financial market. If there were no pending, the property can be financed.
However, although bureaucratic, this part does not require much. The hardest thing is to have good financial planning – which we will talk about later.
“If the person can not keep the value of the benefit for a year, every month, probably will not be able to honor their commitments after the contract,” warns economist Carla Giulliani.
In addition, “the market has as a norm to accept that the family commits a maximum of 30% of its net income in the provision of the property .”
5 – Property, Financing, FGTS and Construtora … Observe and Analyze all this
The property has to be appraised by the bank that will lend the money. But this transition occurs between the bank and the construction company, via specialized engineers and professionals.
For the builders, the ideal is to always read the contract and send it to a specialist. But more importantly, it is best to meet the builder, observing complaints, comments and other constructions and endeavors not to regret later.
6 – The Main Characteristics of Real Estate Financing in Brazil
We have done a previous analysis of the banks and the financings that they allow so that you have a general idea and knows to look for the best options.
Bank of Washington and HSBC finance up to 90% of the total value of the property, and the consumer can only commit 30% of his monthly financial budget and the total term to finance is 360 months.
On other hands, The CitiBank finance less, being 80% of the total value, but the commitment with income and term are equal, 30% and 360 months.
7 – The System of Benefits
Financial experts often say that the Benefit System is the most advantageous. It is called SAC – Constant System of Amortization and different from the Price Table, it has the reduced benefits over time.
It should be noted, however, that in both, the debit balance is always updated by the TR variation.
8 – Remove the property in advance
In general, it is worthwhile to remove the property in advance, but it is necessary to make an account. Check the CET and what rate of return on investment you could make with the amount of the discharge and the interest. Only with this information in hand can you calculate which is the best option.
“Technically, the anticipation of the financing can represent financial gains, but from the point of view of financial education is totally wrong,” says another specialist, Reinaldo Domingos.
For him, it is necessary to develop reserves for other dreams and special needs.
“If it is not that way, since you have done the financing, it is best to have peace of mind and continue to pay the flow of benefits.”
9 – About Buying a Property on the Floor
The positive point concerns valuation. For specialists, the property purchased at the plant tends to appreciate 30% of the original price after it’s ready. So if you bought a property for 100 thousand USD in the plant, if the region is valued at the construction period, it will be worth around 130 thousand USD.
Another difficulty in buying the property is the entrance, which tends to be higher than when it is in the plant.
Another advantage is about maintenance. With the new apartment, it will be more rare to happen problems with finishes, for example.
Of course everything will depend on your haste, your planning, your goal. And not always an apartment in the plant will be valued, just as it can generate problems the used ones as well. The way is to search, always.
10 – Consider Paying Rental to Add Money from the Property to Vista
Before Financing an Apartment or a Home, make lots of bills. Among them, it selects an aside that refers to the fact of paying rent while joining the other party to buy the property in sight . Consider, after all, having a good entrance to give in the entrance of the financing, if any.
11 – Simulation to Rent and to Buy a Property
If you have 100 thousand USD in hand and want to buy a real estate of 400 thousand USD, you will have to finance the remaining 300 thousand. The provision will be 2.1 thousand USD. And in all, you will have paid something equivalent to 895 thousand USD, MORE THAN DOUBLE.
If you use the value of your entry – 100 thousand USD- to invest in the Treasury Direct, you can have an income of 1% per month. If you continue to apply this amount monthly, you will quickly increase your equity and soon you will be able to buy the same house, only in cash.
In some cases, it pays to rent a property until it has the full value of a property, for the purchase in cash.
12 – Never Fail to Make a Financial Projection
That is nothing more than to do the own accounts. Do not wait until only the builder, the Realtor or the Bank Manager do this for you. Incidentally, this is your money and your investment. What is recommended is to use a financial advisory service specializing in real estate to plan the purchase safely.
“It is important to know that not only big banks offer competitive real estate loans ,” says the real estate advisor Frederico Porto..