Financing

Real estate financing needs special attention when we want to acquire a property. There are different ways to finance a property and above all, there are different audiences for funding. We will relate below: Mortgage Financing In particular we want to buy a family home, an apartment or a second home PPE, we must regularly pass through a bank or broker mortgage financing . To determine our ability to obtain a loan, the financial institution will conduct an assessment of your ability to pay the debt. First, the mortgage consultant will determine the capital requirements. To date, 20% of the purchase price is required in equity and the remaining 80% may be paid by a bank. Equity can come from different sources such as: Our savings, our third pillar, the second pillar or our pension fund and a gift from our parents or close. It should be noted that family loans are not accepted by the majority of financial institutions and the second pillar can not exceed 50% of equity, or in our example, 10% of the purchase price. As soon as our own funds together, our mortgage advisor will determine our ability to support the debt. For this, it will calculate the encumbrance we will incur based on an interest rate of 5%. This calculation will help determine whether we can sustain the rent despite rising interest rates. It will add it to the depreciation of your debt over a period of 15 years or age of retirement for the amount exceeding the 65% of the value of your home. To this, add up the amount of 1% in order to make an account of renovation. Funding for our second home will be on the same basis with one exception. The amount of capital will be 40% and it will not be funded by the 2nd and 3rd pillar. Our banker will ask a warranty that will allow it to make sure our house, apartment or cottage in PPE can return it if we were not able to pay the burden of mortgage debt. This guarantee is called the schedule and will be included on the state of charge at the Land Registry. We will set the paper value through a lawyer, notary. Mortgage investors When we wish to acquire a flat or a building yield, also called investment, we can also apply for a mortgage to complete the equity but the calculation is different.