Let’s forget about the 20-30 percent self-sufficiency: it is still very expensive to apply for a mortgage, only the goodwill of the banks that the customer does not have to pay hundreds of thousands. Few people think about the extra cost of borrowing.
Additional costs involved in applying for a loan
While most experts call the attention of clients to the degree of leverage, there are many additional costs involved in applying for a loan that can significantly increase the cost of borrowing a mortgage by as much as one hundred thousand forints.
Good Finance recalls in its latest announcement that it is usually about 30 percent equity that keeps many from borrowing, for example, having to put $ 6 million on a 20 million real estate table.
Most people, of course, expect a regular installment, which is also more than one hundred thousand forints per month. And while it dwarfs that amount, the extra costs of borrowing also make for a smaller fortune. Unfortunately, fewer words are spoken about, though many families require special preparation, even months, for the expenses to be paid by the client.
Here are some of the most common things to look for when you need a mortgage in 2019:
Valuation Fee: Serious Expense. The valuer selected by the bank must estimate the value of the property offered as collateral. The amount of the fee depends on the property, but even with a smaller property you have to be prepared to spend about 30-40 thousand HUF.
Notarial deed fee: a mandatory element, as the bank can act on this if the client does not pay the loan and the contract breaks down. You can also spend tens of thousands of dollars depending on your real estate, loan amount, page count and hours worked. With the $ 20 million property already mentioned, you will almost certainly be expecting a fee of over $ 50,000.
Transfer Fee: There is a financial institution where we also have to pay to transfer money from a technical account to the seller’s specified bank account. In addition, this is from a technical account, not ours, which, if applicable, would allow for a discounted transfer. The fee depends on the amount of credit requested, but can also be in the tens of thousands.
Disbursement Fee: If you already pay for the transfer, the bank will charge you a fee to pay us this amount. The fee is 0.5 to 2 percent of the loan amount, which is 200,000 forints at 1 percent for a 20 million forint loan, but most financial institutions typically have some kind of ceiling.
Ownership sheet: Required document for the loan application, the e-certified version costs 3,600 HUF, but the paper is 6,250 HUF at the Land Registry.
Land registry for lien : The bank registers the mortgage on the property and records it on the title deed. That’s $ 4,000.
Home insurance premium: The installment payment is just one thing we have to pay for for many years. The bank will only allow borrowing if you have home insurance to cover it. For a 60 square meter condominium built in 2000 in the capital, it costs around 15,000 to 20,000 forints per year, while for a Kádár cube in the countryside it can be around 10,000 to 25,000 forints. Of course, the starry sky is the limit if we want other convenience services besides the basic casualties.
If we take a broad view of the costs involved in the purchase, we still have to consider the attorney’s fee, the peppering 4% gain fee and the registration of ownership.
To sum up, we can safely say that at least $ 400,000 to $ 500,000 will still be needed to borrow money, and even if we look at the cost of buying a home, depending on the value of the property, we can even pay millions to the state.
What can we do if we want lower start-up costs?
According to Good Finance, many financial institutions have the potential to reduce these costs. There is a lot of competition, a lot of action, and most banks release some or all of their start-up costs after certain conditions are met.
Examples of such conditions may be:
- we will submit your claim during the promotion
- the credit amount reaches or exceeds a certain level
- do not delay, cancel on time during the term
- credit insurance – this also involves paying a monthly fee
- Allow marketing requests – for personalized offers
- saving a home or pension fund, or possibly using another product – involves regular monthly savings
- home insurance through a bank – also a regular expense
- account opening and income receipt – regular tens of thousands of forints
- do not cancel the loan for the first 3-5 years, otherwise the bank will charge us for the discounts
As can be seen from the foregoing, in order to qualify for the rebates, we will typically have to meet conditions that also involve some expense or great care.
It is worth considering whether you are getting more with the discount than you are paying for the other product
So it is worth paying attention to whether we can meet the terms of the maturity, for example, not to delay the repayment, or to pay it off too soon or too much, as we lose the benefits we have received. Of course, it is possible that we do better without discounts. According to Good Finance, it is worth considering whether you are getting more with the discount than you are paying for the other product, and whether you need the product at all.
For almost three years, Good Finance has been helping the public to be fully satisfied with their financial decisions in the long term. We can compare the most important banking products with the calculators of the specialized portal, and the analyzes and entries on the page help to inform the financial world, making an informed and appropriate decision in the given financial situation.