The National Bank of Hungary expected an average 10-12 percent price increase in the housing market in 2018, which is expected to materialize in the first half of the year. The rise has been going on for years: in the capital, a panel flat can reach 400 thousand HUF per square meter, and brick flats can exceed half a million HUF.
In addition, there is an increase in the price of large cities in the countryside, so at national level we have to raise more and more money to buy our own homes. The rise in price is not in line with the rise in wages, so the question is what can we do if we cannot raise enough money to get started. We wondered if you can apply for a home loan without your own resources, and if so, what are the options without starting capital.
How Much Self-Power Should I Have?
When borrowing, the minimum amount of own funds required is usually 20 percent of the value of the property , or at least that amount, in order for the bank to pay us the rest. This is because the bank can only give the collateral value of the home, which is the reduced value of the real estate market value.
This means that 80% of the value of a 20 million HUF real estate property, ie up to 16 million HUF, can be taken out by a mortgage loan and the remaining 4 million HUF must be raised by the claimant.
Being self-sufficient is not only important for banks
For a home purchase, the purchase agreement may include the payment of the deposit , which is usually 10 percent of the contract value. The deposit can be replaced by a so-called credit agreement, which solves a paradoxical situation: the seller wants to forfeit ownership only after the full purchase price is paid, and the buyer’s bank does not want to disburse until the mortgage is secured by the buyer serving as collateral. property owner.
This is why the credit claim, which is a binding offer sent to the client after approval of the loan application, is binding on the lender, the bank. The loan application includes a letter of approval, personal information and a draft contract. This document is a guarantee to the seller of the property that you will receive the purchase price. The prerequisite for a credit claim is that the bank examines the applicant’s creditworthiness – except for the characteristics of the property you want to buy.
When buying a home, we also have to calculate some extra costs , so it’s worth reserving for them, such as the attorney’s fees, the property tax, and other bank expenses in addition to the home loan. The property tax is usually 4 percent on real estate purchases, but it’s a good idea to find out about the terms, as we can get different discounts when buying a new home or getting our first home.
What are the opportunities for self-borrowing?
If you want to get an apartment without self-sufficiency, we have several options, which we will explain in more detail in the article. If your goal is to take out a home loan, but we can’t generate 20 percent of your own funds, some credit institutions may, under certain conditions, also finance the full purchase price of the home you purchase from a loan .
We have the following options if we are unable to collect the credit for your loan application:
- We can avoid self-sufficiency if we can include multiple properties as collateral.
- Savings already made at the savings bank
- If we are eligible for CSOK , that is, a family home improvement allowance.
- Employer or municipal subsidy or loan
- If we take out a personal loan and use it to finance our own resources.
You are about to buy a home, but you still don’t know how you will finance your dream home? Use the March Hare Home Loan Calculator and compare the best bank deals available today!