Buying your own apartment is a breakthrough in life. To achieve this goal, we need to take out a housing loan in one of the banks currently operating on the market. However, it’s best to prepare yourself to avoid unnecessary stress and possible error. So we will try to suggest how to choose a good housing loan so that you can enjoy your dream apartment without worries.
What characterizes a good home loan?
A housing loan is a special-purpose, non-cash loan, intended for the purchase of real estate. It may be at the construction stage, but also ready to move in. In the first case, the premises come from the primary market, and in the second – from the secondary market. Regardless of which premises we are interested in, the steps taken to take a housing loan are similar. Of course, we should first assess your creditworthiness, and then think about how to choose a good home loan. Let us remember, however, that most banks decide to cover only the costs associated with the renovation or finishing of the premises, and the expenses resulting from the purchase of furniture or simply interior design fall to us.
One cannot forget that when taking a loan, you must have a so-called own contribution. For this reason, it is worth figuring out at what level our contribution is for each bank. Usually it is 20%, but the minimum percentage can be only 10 percent. Which is much more beneficial for us as customers. It is also worth checking exactly what are the conditions for obtaining a housing loan that interests us.
Before you start looking for a good home loan, read the glossary of loan terms.
How to choose a home loan to make it most convenient for us?
One of the most important aspects taken into account when analyzing loan offers is the so-called Actual Annual Interest Rate. The most favorable option for us is the one in which the APRC will simply be as low as possible. This will automatically reduce the amount we will have to pay back to the lender. The amount of the monthly installment, which must be regularly paid for several years, will also be important. Therefore, it is worth preparing this seriously and assessing our income and expenses in detail. Some banks that grant home loans charge a commission that can be as much as a few percent of the value of the loaned amount, while another fixed cost is the so-called margin. When analyzing how to choose a home loan, let us pay attention to what costs we will actually have to bear.