Buying an apartment is a big step in life.
When it comes to buying real estate and solving the grain problem, several things should be considered, such as credit debts and the rest of the troubles that accompany this dilemma.
With rent, the situation is clearer, a lease agreement is signed, a deposit is usually deposited in case the tenant damages the property of the apartment, and if the apartment is rented through an agency mediation, the agency commission appears as a cost, usually 50% of the apartment price. The tenant and the landlord agree on which of them will bear the costs of the rent tax, and that’s where the story with the apartment ends, writes Kamatica.com.
With loans, the situation is somewhat more complex. The differences are that between the buyer and the seller of the apartment, the bank appears as a financier, then the question arises whether the apartment is a new building or not, whether it is the first apartment, whether the loan is insured. We will try our best to explain all the specifics mentioned in this text in the simplest way and present the basic costs that await anyone who decides to buy an apartment using a loan. General about housing loans.
Housing loans are quite common, however, the procedure for obtaining a loan is not the same in every bank, of course it differs depending on whether the property is under construction or “old construction”, according to the currency in which the loan is calculated and the type of interest rate. Banks define housing loans as long-term loans for the purchase of residential real estate.
The interest rate for housing loans can be fixed or variable; fixed interest rate means that the interest for the entire loan repayment period does not change, while the variable interest rate structure contains a fixed and a variable part.
In banking terminology, the fixed part is also called the margin, that is, it is the rate that is added to the base part. The base part represents one of the reference interest rates on the market, if the loan is in dinars, BELIBOR is most often used, while if the loan is in euros, EURIBOR is most often used. BELIBOR and EURIBOR are interest rates at which banks lend money to each other and are influenced by various market factors and central banks.
Due to all the factors that influence these reference interest rates, they rise and fall over time, so it may happen that the variable interest rate that the bank presents to you when presenting the loan is lower than the fixed interest rate, which does not necessarily mean that it will remain for the entire duration of the loan repayment.
When it is said that the loan is in euros or dinars, then it means the calculation of the installment that is paid, the money can be paid into your account when paying the loan in both euros and dinars, however, when repaying the loan, you pay in dinars, because it is the official currency of the Republic Serbia. If the loan is in euros, then the installment is recalculated according to the current RSD/EUR exchange rate and you will receive a calculation of how much money you need to pay for that month.
This suits those whose earnings are in euros, so that way you avoid currency risk, i.e. the risk that the RSD/EUR ratio will change against your benefit. If you receive your earnings in dinars, a dinar loan is more suitable for you, because in that case you do not depend on the RSD/EUR ratio.
This is a typical example of the problem that arose with loans in Swiss francs, at the time of taking the loan in francs, the relationship was favorable, but over time, the franc strengthened against the dinar, so the installment paid in dinars increased drastically.
Banks look more favorably on buying a new property directly from an investor, especially if the investor has a reliable credit rating. The main reason is that such real estate can be sold more easily if the bank is forced to take that option. The second reason is that there are all kinds of malpractices with appraisals in old buildings, which especially repels the bank because it is not in the real estate business after all.
Procedure for obtaining housing loans
The required documentation, steps and costs for obtaining a housing loan are as follows:
Hiring a lawyer and drawing up a pre-contract and contract – 100 EUR lawyer, 100 – 300 EUR notary – a pre-contract is necessary if you are buying real estate that has not yet been built and it states the amount of the advance you pay to the investor. The advance is usually 20% of the agreed price, if it is up to EUR 10,000, no proof of the transfer of funds is required, if it is over EUR 10,000, a statement that the funds have been paid to the investor is required.
The same process applies to the purchase of an old building, except that all of the above can be specified directly in the contract. Appraiser – 100 EUR – the appraiser evaluates the apartment and prepares a report that will be used when establishing a mortgage. Collection of documentation for the bank and approval – commission for the administrative processing of the loan 0.1% of the amount (depends from bank to bank) – statement of earnings, certificate of employment, signing of the contract with the bank.
Insurance with NKOSK – is no longer mandatory, but those who want to will pay a fee in the amount of 0.5% to 2% and more of the value of the apartment. 60,000 EUR is on average 45,000 RSD – from 6,000,000 RSD to 30,000,000 RSD, the fee is 54,720 RSD (scale published on the website of the Republic Geodetic Office) Loan payment Registration in the cadastre – 9,500 RSD If you buy an apartment in a new building, you pay VAT to the investor, which you have the right to return if it is your first real estate, while if you buy an old building, you pay 2.5% tax on the transfer of rights from the value of the real estate. Total costs without VAT and taxes amount to an average of EUR 1,500 with insurance from NKOSK.
Without insurance, approximately EUR 1,000. The average time for the whole process is 2 months, however it can take several months. Banks – housing loans On the part of banks, the procedure for approving housing loans is one of the simpler procedures. The reason for this is that there are not many oscillations and negotiation options with home loans.
The offer of housing loans depends on whether the bank has a contract with a certain investor and provides additional benefits for the purchase of apartments under construction. In this case, housing loans are the cheapest, while if the bank does not have a contract with the investor, housing loans are more expensive, and in that case, the bank with the most favorable offer is sought.
In order to apply for a housing loan, you need to collect the following documents:
- Certificates of the amount of income and two administrative salaries – to be verified by the employer
- Last 3 pay slips
- Confirmation from the PIO Fund about the total length of service – you can get it at the nearest branch of the PIO Fund
- Preliminary agreement on the purchase and sale of real estate – does not have to be notarized
- Turnover by account from the bank where you receive earnings for the last 3 months
- Appraisal of real estate to be purchased
- Title deed of the real estate to be purchased – that the title deed is no older than 15 days at the time of submission of complete documentation to the bank
- A copy of your identity card and a copy of your spouse’s identity card (if you are married).
