Do you want to buy your own property and finance it with a mortgage, but you have a problem with the immediate mortgage of the property? For these cases, there is a short-term loan in the form of a pre-mortgage loan. What is it and what are the conditions for obtaining it?
What is a pre-mortgage loan for?
Are you planning to buy a cooperative or municipal apartment, buy a building plot from the municipality, have a turnkey house built, but you cannot guarantee the property because you are not yet registered as the owner of the property? The solution may be to take out a pre-mortgage loan. What else can you finance with a pre-mortgage loan?
- Purchase of real estate
- Property renovation, modernisation and repairs with your own assistance
- Settlement of co-ownership or inheritance claims
- Buying a property where the seller is not willing to transfer the title to you before transferring the purchase price.
- Consolidation of previous loans for investment property
What are the advantages of a pre-mortgage loan?
This is a short-term solution that allows you to build, renovate and pay invoices to a construction company even if you are not listed as a property owner.
- During the pre-mortgage, you pay a fixed interest rate; the principal is repaid only with the regular mortgage, which it will eventually turn into.
- You can deduct the interest paid from your tax base.
- You can buy the property up to 2 years before it can be used to secure a conventional mortgage.
Did you know that when arranging a pre-mortgage loan, you undertake to provide a suitable property on which to transfer the lien by a specified date?