Most people looking to buy their first property tend to do so by contracting a bank loan , as they hardly have the full amount to acquire the property.
It is true that the purchase of an apartment or house is, in most cases, the biggest family investment during a lifetime. In this way, a well-prepared planning will certainly avoid falling into traps and will allow that in the long term it will be possible to obtain large savings in the total amount to be paid during the financing.
The purchase of a financed property must comply with a set of steps, which, if adhered to, may cancel out unforeseen events and losses throughout the process.
Based on these considerations, I prepared for you a small itinerary to facilitate your journey towards your dreamed first property in Park view city Islamabad .
1. Find out about your credit limit before searching for the property.
To speed up the transaction and have a real sense of the total amount you are able to finance, search the banking institutions for information on the letter of credit, which are pre-approved financing, so that you don’t run the risk of after too much pilgrimage and finally find the property, receive the news that the financing cannot be done because of income, age or any other restriction. These letters of credit are valid and vary between 4 to 6 months depending on the bank.
2. Search for the best rates and terms at various banks.
The best way to avoid overpaying interest rates during the course of the loan is to visit all possible banking institutions in your city in search of simulations and information on the interest rates charged for mortgage loans. Talk to the managers and try to negotiate these fees. Generally, they can be reduced if you choose to transfer your salary receipts and financial transactions to the bank, which can make financing from one institution more attractive than at another.
3. Analyze your household budget.
Keep in mind that this investment will have to be paid monthly with the payment of the monthly loan. Therefore, analyze the family budget in advance to avoid financial constraints. In cases of negotiation of interest rates, default can cause a rise in the monthly interest rate, as the timely payment of installments is almost always a prerequisite for granting discounts on financing rates.
4. Search your property safely.
In addition to the above precautions, it is very important that you are accompanied by a good realtor or real estate agent which can prevent a lot of headaches, as well as streamline your search, showing you only those options that fit your profile. These professionals are also aware of how safe and risk-free trading should be carried out.
5. The FGTS.
For those who have FGTS (Guarantee Fund for Employees ), the use of the amount accounted for in this fund can be handy, as it can serve both as a down payment, as well as for amortization of the outstanding balance. However, its use must respect some rules. In this way, also consult these details together with the institutions you are going to research.
6. SAC or PRICE modality?
In terms of the total amount to be paid by the end of the financing by the bank, the SAC modality becomes more attractive, since the amortized amount of the total debt in the payment of the monthly installment is much higher than in the PRICE option. The SAC modality starts with a larger portion than in the PRICE, however the portions are decreasing in the SAC table and fixed in the PRICE table.
7. Commitment of income to real estate financing.
One of the main factors that banking institutions take into account when analyzing their credit is the commitment of their income. The installment on the financed property cannot exceed 30% of your gross income at most banks or 35% of your net income at some other agencies. If you also have any other financing such as a car or other consumer goods, these may also be included in the amount of your income commitment if they are included in the Central Bank’s single register.
8. Apartment in plan x apartment ready.
This dilemma can be easily resolved. The answer for this item will be obtained according to the urgency of delivery of the property. If you need to move immediately, there is no doubt that the need speaks louder and the best alternative is to opt for a ready-made property. However, if you have more time to move and want to take advantage of better prices, such as new releases, a good alternative is to buy a property under construction or on-plan. However, for this you must know the builder well and the properties that it has already built and delivered so that you do not run the risk of buying and not receiving or still receiving but late.
9. Extra expenses.
Keep a minimum amount of 5% of the property’s value in your account for any expenses with property registration and notary fees. This will certainly prevent you from having surprises when receiving the keys to your dream property.
The more precautions you take, the lesser the risk of suffering losses or headaches during the process of acquiring your first property. By following this script, you will be sure that you are getting a good deal.