1. Financial situation
The first step in the process of taking out a home loan is to assess your financial situation. You need to review your expenses and calculate the amount you can safely pay off each month in installments.
Banks usually lend up to 30% of their net income. It is also important to note that if you do not take out a home loan alone, the bank will examine your income and that of your co-spouse (partner) to determine the maximum monthly installment. However, it is up to you to consider whether this amount, set by your bank, will fit into your budget on a monthly basis.
Self-financing is also required when taking out a home loan. So you also have to see how much self-empowerment you can offer. So how much of your own money can you get into buying a home and paying off the initial cost of the loan is also included here. Or, if that proves to be too little, how much other cover can you possibly offer? These may be additional properties that the bank may still accept as collateral.
2. Real estate selection
This can be followed by the most exciting part of buying a property, choosing a property. Do not hesitate to be careful here, especially if you are looking for a real estate agency.
3. Bank loan facility
It is important to find the most favorable home loan construction in the most suitable bank. Also, keep in mind all the bank charges (brokerage fees, fees, account opening fees, appraisals, attorneys fees, etc.) incurred when borrowing, and that the loan can be prepaid and redeemed.
It’s a good idea to ask an expert for help or calculate on our site so you don’t have to go through all the banks in person.
Be sure to select the bank before concluding the contract of sale because each bank has different formal and substantive requirements for the contract of sale. If these are not fully met or if you go to another bank for credit, your contract may need to be modified.
4. Purchase agreement
A contract of sale is a so-called title reservation contract in which the facts are recorded. They record the amount of the down payment, the amount of the home loan taken and for what term, and the written supplies requested by the bank. This contract must be submitted to the Land Registry prior to commencing borrowing.
5. Borrowing Forms
After the purchase agreement, you can complete the home loan bank forms, ie the credit application form and other statements. These are very complicated to fill out and you should seek the help of a knowledgeable expert.
The valuation is ordered by the bank from an independent firm contracted to it. The appraiser determines the collateral value of the property, from which the bank determines the maximum loan coverage. The value of the collateral, usually 10-20% of the transaction value.
7. Home loan evaluation
Once the bank has received all the necessary documents, it begins to review and verify them, and the credit assessment begins.
Before the loan is paid off, the loan agreement must be taken to the bank’s own notary and the document must be finalized.
9. Land Registry – Law Firm
The notarial deed must be submitted to the Land Registry. The deed is served and stamped on the title deed to begin the mortgage entry. It is still necessary to obtain from a solicitor a so-called final payment statement in which your sellers declare that the title can be transferred.
10. Other conditions of disbursement
For example, presentation of proof of compulsory insurance, receipt of notarial deed, note of ownership, payment of own funds.
The bank will transfer the amount claimed to the seller’s bank account.