First Home Mortgage
You have reached the significant stage of purchasing your first home, an exciting milestone in your personal and financial life. Along with the excitement, it is important to stop and intelligently plan the mortgage, which will accompany you for many years and affect the economic stability of the household.
Mortgage advice is designed to allow you to make informed decisions, instead of acting out of pressure or uncertainty. As part of the consultation, repayment capacity, sources of equity and existing obligations are examined, with the aim of building a financing framework that precisely matches you.
We will help you understand the types of tracks, compare the banks' offers, examine interest rates, linkages and the duration of the loan, and formulate a balanced mortgage mix. The emphasis is on creating a responsible, transparent and flexible repayment plan, adapted to your needs for the near and far future.
Questions and answers about a First Home Mortgage
We have put together for you common questions and answers on the subject of a First Home Mortgage, so that you can receive well-founded and organized information that will help you understand the main concepts, options and steps in the process.
How much equity is needed for a first home?
Usually, you will need at least 25% of the apartment value as equity, because the bank will approve up to 75% mortgage financing for a first home. This capital can come from savings, family help or other sources and is the basis of the process.
What is an approval in principle for a mortgage?
Approval in principle is an initial agreement from the bank to grant you a mortgage, based on the data you provided. It determines the amount and the general conditions, but is not final and subject to additional checks such as property appraisals.
What determines the loan-to-value (LTV) ratio for the transaction?
The maximum loan-to-value (LTV) ratio in a mortgage for buying a first home is 75%. The amount of financing you will actually receive depends on the value of the property as determined by an appraiser on behalf of the bank and your ability to repay.
What is repayment capacity and how is it tested?
Repayment capacity, or repayment ratio, is the ratio between the monthly repayment on the loan and your disposable income. The banks will not usually approve a monthly repayment that exceeds about 35%-40% of your net income.
What is a mortgage mix and how is it built?
A mortgage mix is a combination of different interest rates (such as prime, fixed-rate CPI-linked mortgage track, and variable) that make up the loan. Building the right mix balances the level of risk, the amount of the monthly repayment and the total cost of the loan.
How can bank interest-rate offers be improved?
The interest you will receive depends on your credit rating, employment stability, the amount of equity and the loan-to-value (LTV) ratio. To improve the offer, it is recommended to present a strong credit history and increase equity.
What are the associated costs of a mortgage?
The mortgage process for a first home includes additional costs beyond the price of the apartment. These include a bank file-opening fee, payment to an appraiser, and the purchase of life insurance and building insurance as a condition for receiving the money.
How long does the mortgage process take?
The mortgage process for first home buyers, from the moment of receiving approval in principle to receiving the money, usually takes between one and two months. The duration depends on the completion of all the required documents and completion of the appraisals.
What is the common mistake when buying a first home?
A common mistake is signing a purchase contract before getting a mortgage approval in principle. It is very important to get approval from the bank first, to make sure you have the necessary financing and not risk breaching a contract.
How do existing loans affect the mortgage?
The bank examines all your financial obligations, such as existing loans, when calculating repayment capacity. High liabilities may reduce the amount of the mortgage that the bank will agree to approve for you.