7 July 2020
English
If you choose to buy real estate from the bank the conditions may be even better. You should assess several points and decide what is best for you.
Are you considering buying a house in the near future? Follow this advice and also look for bank properties! The bank houses can have several advantages and some of them are the lowest value in relation to the current market, excellent state of conservation of the property and financing conditions are very attractive and facilitated.
Banks facilitate the sale of homes because they rely on financial liquidity and not on accumulated real estate. Thus, a bank property ends up having the best possible conditions for financial institutions to increase the chances of turning these houses into cash.
Since the spread can be classified as the profit the bank will make on the loan, banks have the ability to sell a house by lowering this parameter. And, the lower the spread, the better for the buyer. A few years ago spreads were quite high (3.5% to 4%), but now they are more accessible.
In addition, the spread is low since the purpose of banking is to achieve business with the generation of financial liquidity, combining with other variables, it may be possible to reduce the spread even further by a few tenths.
In the "conventional/traditional" sales market, banks and lenders usually guarantee a loan of 70 to 80% of the value of the valuation (do not forget that the value of the valuation is not yet the value of the house). But this parameter is also different with regard to banking real estate. And this point is one of the great advantages and one of the reasons why people choose to look for houses in the bank.
Most financial institutions offer financing up to 100% of the value of the property if it is from the bank, so if the property is valued at 150,000 euros, you can ask for 150,000 euros, without having to have money available to pay the down payment.
In the case of bank real estate, there are some situations where the mortgage can extend to 50 years. The most common period is 30 to 40 years, there is more room for manoeuvre, and at the end of the contract the age must not exceed 75 or 80. The longer this period, the more interest you have to pay.
In the banks' houses it is also possible to choose the option of "lack of capital" which consists in paying only the interest over a certain period of time (it is common to be during the first 5 years). By paying only the interest, there is a big difference in the instalment, which is much smaller. But of course, once this initial period is over and the outstanding amounts and interest are paid, the instalment will be higher.
When applying for a loan, you will have to count on the costs of the installments in addition to the commissions and bureaucratic charges that are related to the process, which can be as much as 10,000 Euros! Opening commission, dossier study, property valuation, deed, notarial costs, among others, are some of the costs that are sometimes borne by banks if you choose to buy property from the bank.
Buying a bank house can become a good investment. If you have some money in your possession to invest and when a good opportunity arises, this can be a good source of income as you can then put the house up for sale again and make a few thousand euros profit.
To buy a house from the bank you have to limit yourself to the current offer. The number of houses available at that time will be lower than the traditional market supply. Keep the focus, search and wait for the house that suits you.
In many situations, former owners do not facilitate the process when their house is foreclosed by the bank. They may not want to leave the property or create obstacles in order to make this process last longer.
When buying properties from the banks, make sure that they have no debts. To prevent these debts from passing to you, confirm that there are no debts in respect of electricity, water, gas, condominium bills, among others.
Contact Buy House Portugal for our banking properties!
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