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The recent rise in property prices has not deterred consumers from owning their dream home. Overcoming financial problems to buy a house, you must listen to the following strategy to apply for a mortgage loan of 1 billion lei!
For people in Indonesia, the ease of owning a house today is not difficult. Because, there are many financial facilities available that can help achieve this desire.
One of them is availing Home Equity Loan (KPR) facilities through banks.
Mortgage products are included in the type of long-term credit whose repayments are made in at least 15 years to 20 years.
Therefore, KPR requires a long-term commitment as well as careful preparation.
However, before applying for a mortgage, there are many things that must be observed so that the decision to use the mortgage facility is the right decision according to our needs and financial capabilities.
Strategies to consider when applying for a mortgage
As a first step, we must first analyze the market price of the house and compare it with long-term financial capabilities before making a choice.
In addition, we must also consider the size of the house, large or small, its location in the center or on the outskirts of the city, its new or used condition.
After we have an idea of the right price in the home market, we can start to study the mortgage products offered by the banks.
Thus, we can find out the amount of funds that must be prepared to access the mortgage facility, which consists of an advance and installments as well as interest.
In choosing the right mortgage product, we should first consider a few things.
For example, the reputation of the mortgage provider institution, interest rate facilities, service benefits and assistance provided when the mortgage is executed, early repayment penalty charges, administrative costs and others.
(Also read: 5 Reasons You’re Still Struggling to Buy a Home in Your 30s)
2. Prepare the payment in advance
On the other hand, we also need to prepare strong funds and commitments, considering that the tenor period generally lasts from a dozen to tens of years.
Initial funds to be prepared as an advance (advance/DP) is 20 to 30 percent of the house price, and the rest is paid in installments over the tenor.
This is the point that usually makes many people afraid to apply for a home loan. The reason is that home prices, which continue to rise, make the down payment necessary to apply even higher.
However, we cannot run away from the reality that home equity loans require a down payment.
Usually the bank will give us a maximum credit limit of 70% of the value of the property you want to buy.
Furthermore, since September 2013 Bank Indonesia has tightened mortgage lending through regulations on the credit/asset ratio (loan to value/LTV) and the ban on mortgages.
So with this percentage, we have to prepare a down payment of 30% of the price of the property we want to buy, or around Rp 300 million. if the property we want to buy costs Rp 1 billion.
3. Start investing for DP
Instead of giving money saving “put” into the account just like that, try to start investing from now on.
That way, savings can grow faster. If you earn between IDR 5 and 10 million per month, you can invest in mutual funds or other types of money markets.
Meanwhile, if we want cash flow stability or cash flowit never hurts to choose medium to long term investments like fixed or mixed income mutual funds.
In this way, the investment can provide an eight-fold rate of return over five years.
If the initial fund we enter is Rp 37.5 million, then we will get a result of Rp 300 million, which is enough for an advance.
The assumption is that I saved Rp 3.13 million per month for a year before making the investment.
4. Pay attention to installments
We need to be aware of the interest rate, type of interest, fees and administration fees, as well as the penalty fee if the repayment is accelerated.
If you are young people who are new to work, your income can continue to increase as you advance in your career.
Choose a tenor that fits your current financial situation and future projections.
The choice of tenors in banking is very diverse, ranging from 5 years, 10 years, 15 years, 20 years, 25 years, up to 30 years.
This variety of credit duration options is a way for banks to reach out to different classes of potential borrowers, as each person’s pocketbook is different.
For example, bank A offers a mortgage with an interest rate of 10% per annum. Using a mortgage simulation, to buy a house for Rp 1 billion with a down payment of Rp 300 million, our total loan is Rp 700 million.
Thus, the sum of installments per month becomes around 6 million Rp. This is if we choose a mortgage term of 30 years.
For the record, we shouldn’t force ourselves to take a shorter tenor in pursuit of lower interest costs.
By choosing a tenor based on ability, our cash flow still leaves enough funds for daily needs, protection needs and also for other investments.
(Also Read: The Right Steps To Apply For A Mortgage For Young Couples)
Don’t forget to prepare a mortgage advance with savings!
So this is the mortgage application strategy that you can do before you apply for a mortgage. For those of you who are interested in applying for a mortgage, it is better to do some careful planning in advance.
Like, preparing a down payment to save special funds for rates with sage part of your monthly income.
You can set up a special savings account to buy a house, choosing different banks like CIMB Niaga, Danamon, and others according to your needs!
For the process of applying the savings, you can do it with CekAja.com through an easy, fast and practical process!
What are you waiting for? Let’s apply now for savings with CekAja.com!