To many, the dream of owning a home seems like an impossible thing. Much of this perception is in the cost of a property: it is high and far beyond what the average Brazilian can afford. In this context, there is no alternative but to look for the scenarios available in the market. The loan to buy property is one of them. However, although it seems like a very interesting proposal, there are some points to consider in this modality. In this post, we will explain to you what they are. Check out. With the FHA mortgage this is important now.
What are the disadvantages of loan to buy property?
This type of loan or financing works as follows: the consumer makes an agreement with the institution to pay part of the value of the property and in return commits to repay this amount in installments, with interest, for a certain period. If on the one hand the interested person obtains the property immediately, on the other hand he is subject to some conditions imposed by this modality.
This is one of the main problems with financing. Interest rates are often quite high and are a relevant factor in the total loan amount. Moreover, in the beginning the buyer may pay more interest than the value of the property. Since most of the first installments consist of the cost of interest. The monthly payments still count on the amount of CET (Total Effective Cost), which are all financing expenses and that make a difference in installments.
Risk of losing the property
When closing the contract with the financial institution, one of the risks for those unable to pay all installments is losing the property. When financing a property directly on the plant with a construction company, before obtaining the keys, it is possible to go back in the purchase. This is known as cancellation. However, in case of financing with banks this is not possible. Being allowed in cases of default for more than 3 months, the institution will take home back.
In this process happen the following behaviors?
Notification: After the time limit is exceeded, the bank sends a notification to the debtor. It can be sent either by letter or by a notary officer.
Property is auctioned: after the subpoena, the consumer has up to 15 days to repay the arrears. If not, the property can be auctioned in 30 days.
If the auction value is higher than the debt, the consumer gets the difference back. However, if the amount is less than or equal to the debt, it is settled, but both the property and the money already paid on the installments is lost.
To make sure that the buyer will be able to repay the loan, there are a number of prerequisites that the institutions determine. For example, the applicant must be 18 years of age or older to make a loan. In the event that you are over 60 and intend to make a 20-year loan, some institutions may deny credit. For them, the maximum age until the end of the contract must be 80 years. Another requirement is to have to prove that you can commit to the benefit and that it will not influence more than 30% of your income.