Which is better: home loans, bank offers, or home savings?
Posted On July 13, 2019
The fact is, they have 3 2 year home savings contracts and would like to borrow 12 million because the new home they look for costs $ 31 million.
The question is whether to take out a traditional home loan or use a home savings that has not expired but has been saved for 2 years?
Here’s the answer
The question is multifaceted, with significant details missing, but let’s examine what to expect when choosing to use home savings before maturity, or what to do when analyzing a home loan ?.
1. If you count on LTP, $ 12 million gives you more options.
- eg. Three 6-year LTP contracts are also associated with a 6-year home loan maturity, and since the home savings are paid for 2 years, the total term is 10 years repayment.
2. Another option for LTP
- the so-called bridging loan is HUF 12 million. This is HUF 12 million with contractual home savings and a saving of HUF 48 thousand per month. If the loan applicant can still pay the monthly 3D LTP, which is a saving of HUF 48,000 per month, then the income will allow him to take out a loan of 12 million
What can a “traditional” loan provide?
Under the following conditions:
- a total of HUF 31 million is needed
- A loan of HUF 12 million is required
- We expect a 10-year maturity
- We look at 5 and 10 year interest rates
- monthly family income 400.000 HUF
- use of own bank or income directed to the creditor bank and opening an account
3. With this in mind, the expert recommends a consumer-friendly loan that is a 5-year fixed-rate loan with 4% interest rate, a 10-year term and an initial monthly repayment of $ 120,000.
4. If we follow a fixed consumer-friendly scheme for 10 years instead of 5 years, we will charge 5% interest and a monthly installment of $ 129,000. If we had more information, we could detail the options for an instant loan with LTP.
Back to the bridging loan, what do we need to know?
- The monthly income is often high, at least HUF 400,000
- In terms of interest rates, they can be more favorable than home loans, according to the expert, even the best home loans, consumer-friendly loans, outperform!
- Significant interest on an immediate loan is payable only at the end of the initial period, at the end of the period, at the time the loan is obtained, less interest, currently 4 years higher, 6 years lower, associated with the home loan
- The interest is discounted, but all additional costs must be paid, such as disbursement, notary public, appraiser fees. These costs can be up to 1% of the debt.
- It is important to compare the 2 options, instant loans and best home loans before deciding.
- Also keep in mind that if they can pay LTP for at least another 2 years, it is worth borrowing a bank loan, as in this case they enter into a state-subsidized discount so they can pay off their loan by shortening the repayment period.
According to expert opinion, it is best if you can pay LTP for up to 2 years with the consumer-friendly loan you have taken and then put it back into the loan! Banks are offering much better rates than bridging loans, while LTP repayments reduce the repayment and they can also make a prepayment free of charge if they require a consumer-friendly loan in advance.