Internal credit: housing - now, money - later
What is a domestic loan, who can benefit, terms and conditions, etc.Everyone knows that apartments are expensive. People have to save money for years, even decades, to buy a house. But what if you want to buy an apartment soon, but you can't pay the full amount? In this case, there are two tools that make buying a home more affordable: mortgage and home loan.
Around the world, all customers can be divided into three groups:
- Those who are ready to pay the full cost of the apartment immediately. This group usually wants to get additional benefits from the seller. For example, cheaper prices or bonuses like parking.
- Those who use mortgages are paid a small amount for a long time.
- Internal credits.
The mortgage usually ranges from 30 to 50%. 'What is a mortgage?' You can find more detailed and extensive information in the article. At the same time, by clicking on this link, you can familiarize yourself with the conditions for obtaining a mortgage loan and the necessary documents.
What is the share of domestic borrowers? According to the sales departments of residential complexes, domestic loans are mostly popular among those who buy apartments in economy and comfort class buildings under construction. The share of this payment scheme in business class is about 10%.
Internal credit is also used in other countries. In Bulgaria, for example, this payment method is extremely popular in the resort property market, which is targeted at foreign buyers. During the crisis, at least 20% of transactions were carried out on a domestic loan. At present, the share of projects implemented on such terms has slightly decreased and does not exceed 5%. At the same time, second-hand apartments are almost never offered on credit domestically.
Who can benefit from a home loan?
Any home buyer who does not intend to use a mortgage can become a potential user of this service. These include high-income people who can easily pay their monthly payments, those who do not want to sell their other property and postpone their purchase, and entrepreneurs who prefer this method to get money out of their business. As a rule, it is more expensive to buy an apartment with a domestic loan in the early stages of construction. It is known that after the commissioning of a building, the price can rise up to 30% per square meter. In addition, as floors grow, the range of good housing decreases.
Conditions of the internal credit: percentage and interest-free
In fact, in addition to providing interest-free loans for apartments in buildings under construction, the phased increase in prices per square meter shows that companies are compensating for the corresponding interest. That is, although formally it is called an interest-free domestic loan, in most cases, interest is included in prices. Real interest-free - these are internal loans for 3 or 6 months in finished buildings. This shows that the best time to buy an apartment with a home loan is the foundation-laying period, that is, the initial stage. This is the period of time when companies spend the most money, must maintain the required pace of sales and give the project a competitive advantage. To use a domestic loan, part of the cost of an apartment, in most cases 30-50%, must be paid. The payment period is different: it can be monthly or it can be provided before construction is completed. Payments are made in equal monthly installments or according to a set schedule. In Europe, the average maturity of a domestic loan is 2-3 years. At the same time, the time frame can vary from six months to ten years, depending on the country and conditions. The down payment varies within 40%. Currently, domestic lending conditions have been tightened, which indicates an improvement in the financial position of both buyers and construction companies. Usually, if developers don't feel completely reliable, payment terms become more attractive to buyers. In Bulgaria, for example, at the height of the crisis, domestic loans were issued for ten years.
If the payment schedule is violated
When buying an apartment with an internal loan, a purchase and sale agreement is concluded between the buyer and the company and payment terms are set. In some cases, this is indicated in the contract itself, and sometimes a payment schedule is drawn up. It should be noted that in most foreign countries, when concluding a contract, a separate payment schedule is drawn up. Since the buyer makes monthly payments, they are given a check and upon completion of the payment they are presented with a financial statement confirming that they paid the full value of the house. Any restrictions or penalties for late payments vary from company to company. Sometimes this point is not allowed, and sometimes there may be penalties. In case of complete insolvency, in most cases, the money is returned to the buyer with a fine, and the apartment is sold to a new buyer. Of course, the buyer can find a client and sell his rights and obligations (ie debt) for the apartment.
