21 Things To Watch When Buying Your House (On Credit)
One of the decisions with the greatest personal financial and emotional impact is the purchase of your own home. With credit or not, it expands us, on most of us, to a serious stress test.
Over time, we have gathered the most important elements that you should consider when you are on the threshold of your home purchase.
1. Location and neighborhoods. Americans say “location, location, location” and know why. The price or perceived value of a property depends directly on where it is located. You can have a magnificent villa in the middle of an evil neighborhood and its value will be considerably diminished. While a cheaper house on the outskirts will increase your spending time and money on work and school trips.
2. Financial immobilisation . What is the amount you are blocking to buy this house? Even on “First Home” loans you have to put down a sum of money as an advance for the bank to become your partner in the purchase of the house. That’s the amount you’re immobilized. The basic question is, how much money could produce this amount within a time frame equal to the amount of credit.
3. Evolution of property prices. It is one of the most important indicators that shows you the price trend for the area you are interested in and how it behaves
this area with similar ones in the same locality. Very interesting information about this topic can be found on the Imobiliare.ro portal.
4. Rent growth rate. How the rents have evolved in the area where we want to buy the property in recent years and what will be the future trend. It is a very important indicator if we want to buy a property to rent it.
5. Debt calculation currency. If you buy the house with a bank loan, the currency of the credit would be ideal to be the currency in which you receive most of the income. Otherwise, you might have very unpleasant surprises such as Swiss francs (CHF). Credits in that currency led to a doubling of the monthly rate within a few months.
6. Duration of credit. Without too many calculations, most credit buyers use the maximum lending term (30 years) just because they offer a lower monthly rate. Finally, the total credit cost will be considerably higher. On a 50,000-euro credit, 25-year instead of 30-year-old, you can put in your pocket an amount of nearly 10,000 Euros.
7. Interest rate. It is by far the most important but most difficult to control element. With a 50,000-euro credit for 30 years, a 1% difference at the interest rate can bring you additional costs of over 11,000 euros. Obviously here is a very important part of your information on market loans and your negotiating skills. A very valuable resource for credit analysis can be found at www.conso.ro
8. Level of Property Taxes. There are differences between the taxation of property belonging to individuals and legal entities. It should be noted that the taxes on buildings of individuals increase drastically (65% -300%) in the case of possession of more properties than the residence.
9. The duration of ownership of the building. How long do you want to live in that home? If it is just a temporary home to complete your studies or you really want to make a home where you grow up your children.
10. The renovation costs of the building. How much will it cost to renovate and redecorate your home. No matter who lived there before you, you will certainly need to invest a considerable amount of money in renovation.
11. Maintenance costs. That is, all the expenses we have to make to maintain the dwelling. In addition to utilities, joint spending can have a major impact on our personal budget. For example, at a house in a residential district, only street lighting and street cleaning costs 45 euros per month.
12. Utilities costs. All that means the utilities necessary for the optimal comfort of the house. Heating, running water, lighting and all the other, correlated It is good to know them before buying the house because otherwise you might have real surprises. It is not the same to pay utilities of 500 lei or 200 lei a month, just because you have a very high energy house.
13. Degree of finishing. Most sellers of new homes, selling semi-finished dwellings. First because they are cheaper and then can be personalized by the buyer. The finish of the house will affect the total cost of the house by at least 15-20%
14. Tax on the sale of property. When you sell your property you will pay a tax of between 1% and 3% of its value depending on the transaction value and the period of ownership of the property. If the ownership of the property is less than 3 years, you will pay the maximum amount. At a property of 45,000 euros owned less than 3 you will have to pay a tax of 1,350 Euros.
15. Cost per square meter useful. One of the key indicators in real estate, because it allows comparison between different areas and even between countries and localities. The maximum utility is Imobiliare.ro (IMO), which will give you real data on transaction prices in the main 6 cities in the country.
16. Costs of housing insurance. That’s where you want to secure your home more than the mandatory insurance cost of 10 Euro / year. When you make an optional insurance you will pay annually between 0.1-0.4% of the insured amount of the dwelling.
17. Distance to place / places of work. Crucial for large cities or for localities away from jobs. The cost of time-shifted journeys and money may in some cases even amount to a significant percentage of the money earned and hard earned each month. I know people who spend more than 4 hours each day on their way to and from work. Worth this effort?
18. Distance to kindergartens and schools. Twin sister with distance from work, distance from schools is burdensome for both children and parents. Especially today when parents would park the car at the door of the classroom, if possible. Just to keep their little beads down.
19. Energy certificate and energy class. Interestingly, because it is mandatory when we want to sell the home. With a big budget impact when the house’s energy class is closer to G (consumption of 820kW / m2 / year), it will bring heavy heating costs, especially when we have low incomes.
20. Equipment and finishes. The more advanced they are, the harder our financial effort to redecorate and lift the comfort standard of the dwelling. Obviously provided that these finishes are to the likes of the new owners.
21. Useful area per lessee. An indicator of the standard of living and comfort, with an average of almost 20mp / lessee, places Romania (again) at the European rank of the standard where the standard is 36 sqm / tenant.