Real estate credit is one of the products most requested by clients from financial institutions. They are of great importance to a dream that many have in common: the purchase of their own home.
Knowing the financing is essential to consider this option, checking all its conditions and the rules to get mortgage approval. How about we see all these details now?
Understand what mortgage credit is
In simple lines, we can define real estate credit as a loan provided to a person to buy a property in Capital smart city Islamabad by making a financed payment.
Those who offer this product are banks and financial institutions. These institutions pay off the property and receive payment directly from the buyer, within the term and conditions stipulated in the contract, such as values and interest rates.
This type of credit can also be requested for the purchase of building materials, for those who want to start the property from scratch instead of buying it already built.
It is important to emphasize that this modality is different from property refinancing, which consists of a credit provided under the condition that the person’s property remains as a guarantee of payment. These are two totally different types of loans, but sometimes the names of the products are confusing.
The buyer cannot sell this property during the payment period to the financial institution. This is a form of guarantee of discharge, provided for in the contract signed between the parties.
Know the main types of this financing
Real estate credit can be done in different ways, through two systems: the Housing Finance System (SFH) and the Real Estate Finance System (SFI). Each of them has a different way of operation. Get to know the different models to understand which one best suits your reality.
Housing Finance System
The SFH is the main real estate financing system and has a great advantage, which is the possibility of using FGTS money to buy a house, but limiting the amount spent on the property. On the other hand, it offers the lowest interest rates of the modality.
It only covers financing in which the maximum value of the property reaches R$750 thousand, in Minas Gerais, the Federal District, São Paulo and Rio de Janeiro, and in other states this limit is reduced to R$650 thousand. The assessment is carried out by brokers from the financial institution.
Another important detail about the values is that the financial institution can only finance 90% of the property’s total and that each installment can only commit 30% of the monthly income of the person purchasing the property.
Real Estate Financial System
The SFI takes care of financing that exceeds the amount of R$ 750,000, the SFH limit, in addition to covering some types of properties that do not fall within it, such as constructions for commercial purposes.
Unlike the SFH, in this modality there are no restrictions regarding the percentage of the buyer’s income that will be committed to the installments, as well as there is no maximum value when evaluating the property. Financing can be from 80% to 90% of the property’s value.
By working with larger amounts and with less restrictive rules, in the SFI the financing interest rate ends up being higher. In common, the two systems have a discharge limit of 35 years (420 months).
Find out how the financing process is
Knowing the details about how the mortgage itself and everything that involves the payment terms, modalities and fees, it is now important to know how the application process is.
There are a few steps until the final moment of signing the contract for the purchase of the property. However, to make it happen it is necessary that each of these moments is done in the right way. See below how it works!
The first step is to simulate the financing with the financial institution, in order to have an idea of how much the total cost would be, the details of the property purchase and the payment method.
This first step is essential, as the buyer informs how much down payment they could give, what their monthly maturities are, and other important issues to proceed with the financing request.
This simulation can be done online, with the customer filling out all the requested data and, thus, being able to make sure that it is within the minimum requirements to be able to contract the product, including presenting a negative certificate.
It is also important to be aware of the need to go to the registry office to expedite some type of document . So, it is essential to know in advance where to find one and to know the types of registry offices that exist.
The future buyer can carry out this simulation in different financial institutions, so that they can find more suitable conditions according to their reality, since the values and interest rates vary from one to another.
Credit consultation with the institution
After having done the simulations and having decided which institution offers the best conditions, it is time for the buyer to go to one of them to check the possibility of credit and start the application process.
The client will then consult their possibilities according to their maturities. For this, he needs to bring proof of his monthly earnings, as it is a requirement of financial institutions.
If the credit request response is positive, the bank proceeds with the request and starts evaluating the property chosen for the credit. Therefore, the institution sends an accredited broker to do this.
It is important to remember that the bank has its parameters and restrictions regarding real estate. With a positive assessment, the process of targeting the type of financing begins, such as whether it will be done by SFH or SFI.
Preparation of the financing contract
Credit: ok. Property: ok. Now is the time to write the contract! At this point, it is necessary to provide all the documentation required by the bank and, with it ready, read everything thoroughly before signing, clearing up all possible doubts.
With everything right and after signing the contract, the financing confirmation process will take place within a period of 30 days.
Author: Legal Documents, blog specializing in legal and business content