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Buying an apartment: installments or mortgage

  • December 18, 2018

Between experts, in the field of real estate, disputes often arise regarding which of the options for buying an apartment is the most profitable installment or mortgage? Both of these options are interesting, and have their own advantages and disadvantages. Let’s take a closer look at their features.

Mortgage

To make a mortgage loan, for the purchase of housing, a person needs to make a lot of effort. First, he needs to convince the bank of his solvency. To do this, you need to collect the required documents, and submit to the selected bank. Further, a special commission will make a decision on the issuance of a loan to a person. Typically, the deadline to be assigned to pay off the loan is no more than thirty years. The initial contribution, which is mandatory, is usually about 10% (a large amount is charged by some banks). However, the recipient of the loan has the opportunity for early repayment of the loan ahead of schedule. You will be interested in ready -made new buildings in the suburbs with the finish.

Installment plan

All actions, on the design of installments, are simpler than a mortgage loan in the bank. The buyer should not go through any bureaucratic and paper procedures. In order to get installments, you only need a passport.

The most profitable and reliable installment option is to buy an apartment right from the developer. The buyer and seller, in addition to signing the contract, who is to be purchased by real estate, must also conclude an unit accumulation agreement. This document is supposed to install the installment until the final completion of the construction. You can also indicate there a longer period of payment. When applying for installments, there is practically no risk of refusal, but property rights can be obtained only after the debt is completely repaid to the developer. The average installment period is usually from six months to two years. The amount of the initial contribution is much higher, in comparison with mortgage lending, and is 25-30 %. The entire amount can be paid by the client ahead of schedule.

When buying housing in installments, a person connects himself with a higher financial burden. In addition, installment plan is more severely cut by the terms that are allocated to fully repay the debt.

Install, this is a more profitable option for people who are waiting in the income of a large amount of money in the near future. Most of people using installments are people who expect to receive an inheritance, or expect to sell old property. In addition, this option is actively used by businessmen, with solid investments that can make a profit.

Experts note that installment plan is more often used by buyers of elite housing, while people are used by people who want to buy housing economy or business class.

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