A loan for a separate room will cost more than a regular mortgage. Banks are reluctant to lend such options, and the demand from customers for them is falling.
Mortgage to the room – why is this loan more expensive?
The reasons for the decision to acquire a room (and not an apartment), and buy it in a mortgage, a few.Firstly, it can become an outlet for people who cannot accumulate a separate apartment, and want to have their “corner” now. Secondly, many people buy a room in a mortgage for the sake of the capital residence permit, which opens the “door” to the world of attachments to district clinics, as well as kindergartens and schools. The right deals are there with the mortgage broker Geelong .
Why is the loan room more expensive?
Banks are reluctant to issue such loans, because checking documents for an apartment in this case requires more thoroughness and this despite the fact that the amount of the mortgage is less. And the rooms themselves, which go as collateral for a mortgage, are not such an attractive object for financial institutions.
Most often, banks prefer to lend to the “last” room in a communal apartment, provided that the person who buys it becomes the sole full owner of all real estate.
If the client has more liquid collateral than a room in a mortgage, the chances of obtaining such a loan are higher. The reason is the difficulty in implementing such a room, if in the process of paying off the debt “something will go wrong.” The situation is aggravated by the fact that, in addition to the client, third parties are among the owners.
Why does demand fall?
Demand for “room” mortgages is indeed declining lately, which is facilitated by the deterioration of the “secondary housing”, the departure of cheap “affordable housing” from among new buildings, as well as the gradual transition of once communal apartments into the ownership of one owner.
What room can I get a loan for?
- First, it must be isolated. Secondly, designed as a separate property. Thirdly, it is necessary to obtain the written consent of all other tenants of the apartment to purchase such a room, since they have the priority right to buy it.
- In addition, it should be borne in mind that for this case the figures are very approximate. In our example, a mortgage was considered at 12% per annum, a minimum down payment for this mortgage (20%), and annual insurance payments were not taken into account. But in general, such an option as payment of a mortgage at the expense of renting an apartment is possible. Of course, you will see real income from it only in 30 years, but your children’s housing issue will be resolved.