There is a very interesting trend in the real estate market. It turns out that instead of buying apartments, we decide to rent them more often. However, if you don’t rent an apartment, then … build a house.
Looking objectively, this should not actually surprise us – just a few steps of adding to find out that such a solution is not much more expensive than renting and paying for premises that do not belong to us (and never will), and makes us become owners who invest their capital in a specific property. How to start such an investment project? Is it possible to finish it without taking out a mortgage? If not, how much credit should you take to build a house? Let’s take a closer look at this topic.
Searching for your own angle
Young people are not in an easy situation right now. Buying your own apartment is a very big expense. Very few can afford this type of cash purchase. For most, gathering 20% to secure the own contribution necessary to take out a mortgage is a real feat.
That is why it is worth considering what we need. Whether it should be a house, an apartment, or maybe renting will be the most reasonable solution, because we do not know where we will party for a long time and investment in real estate may prove to be a misguided idea, and ultimately a problem. Once our calculations, lists and thoughts show that we decide to build a house, there will be more dilemmas.
Building a house: with or without a loan?
The answer to this question depends on how much capital we have. There are several options. The most comfortable situation is for the owners of one or several properties whose sale will generate sufficient funds to build a house.
Holders of investment funds and savings accounts, kept and topped up for years, will also have a downhill turn, as the money accumulated on them will allow you to buy your own four walls almost immediately.
Even if not entirely, most of it. Remember that when we do not have the entire amount needed to buy real estate and we decide to help from the bank, it will be necessary to finalize the transaction own contribution of at least 20% of the value of the house.
Not enough funds? A home loan will help
Those who do not have either their own premises or adequate savings, should begin by accepting the idea that one of the solutions is a loan for building a house and showing adequate financial capacity to get it at all. However, this is not such a simple matter, as it may seem. The bank will thoroughly review our financial situation, the number of people in the household, earnings, type of contract and the period for which we have been employed. It will also assess whether we have provided a reliable estimated construction cost.
Is it worth taking a mortgage in the face of such procedures? Indeed, formalities can go on forever, and the amount of commitment means that we risk a lot. On the other hand, if we have no other options, apart from giving up construction plans, there is no chance to get around these formalities.