To get a mortgage, you first apply for a loan promise. Below you can read more about how to take out a home loan. It is easier to make a good home purchase if you are prepared and know how much you can borrow. When you begin searching for a new house, it is wise to have the loan promise in order even before the show. A loan promise is an advance notice from the bank about how much you may be able to borrow for your new home. However, it is necessary to keep in mind that the loan promise is limited in time and, therefore, only applies for a certain period. You also find out how much the bank thinks you can afford with a loan promise. You can embrace up to 85% of the value of the home. You need to shoot the remaining part yourself, a so-called cash bet.
Review your finances
Before looking for condominiums, reviewing your finances may be a good idea. What can you afford? Start by doing a mortgage calculation and see your housing cost. Then you know how much you can afford and can focus on the right home. Remember to consider costs such as electricity, property tax, and the margin for interest rate increases.
How much can I borrow?
How big a mortgage you can receive is based on many different things you agree with your bank. The bank considers, among other things:
- How many of you are in the family
- Form of employment
- Household income
- How much cash bet can you put
- Other possible loans that you or you already have.
- The monthly fee to the association (if you want to buy a condominium)
Apply for a loan promise
It is essential to be prepared. You don’t know when your dream home will turn up. With a loan promise in hand, you know in advance how much you can borrow and can strike immediately when you have found your new home. A loan promise costs nothing, is not binding, and is limited in time.
Valuation of existing housing
Do you own a home to be sold while you’re looking for a new one? Of course, we are happy to help you sell your current home. Contact your local broker for free valuation and advice. Then you get a head start when the dream home appears. Together, we lay the foundation and tailor your home sales search for your new dream home.
To take out a mortgage, you must have a cash contribution of at least 15% of the price of the home. A cash contribution is part of the purchase price that is not covered by the mortgage.
Down payment loan
At the housing deal itself, you need to pay a down payment. It is produced when you sign the purchase contract and must be paid back by the seller when you gain access to your new home.
A bridging loan is a temporary loan for you who take over your new home before you have had time to sell your previous home. The sale of the old home usually finances the new home, and if you have not had time to sell the old house, a situation arises where you lack the purchase price for the new home. You will repay the bridging loan as soon as the old home has been sold.
The size of the mortgage
When you take out a mortgage to purchase a house, the mortgage may not exceed 85 percent of the purchase price, i.e., the final price for the home. The remaining 15 percent must consist of a cash contribution. If you buy a home for $1 million, the loan must not be more than $850,000.
On March 1, 2018, there was also a stricter repayment requirement, meaning the bank needs to consider the loan amount to your income. New borrowers with mortgages that exceed 4.5 times the gross income must repay at least 1% of the mortgages in addition to the application requirement.
- If you have a loan between 70–85% of the market value, you must repay at least 2% of the loan amount per year.
- If you have a loan between 50–70% of the market value, you must repay at least 1% of the loan amount per year.