Are you in the process of buying a property in Malta and don't know where to begin? Well, you're not alone! Let us help you out with our 9-step process to home ownership.
Starting the journey to home ownership might seem a daunting and insurmountable task. It is time consuming, painstakingly slow and an extremely important milestone in one’s life. Buying a property in Malta is the single most expensive purchase, and largest investment many make during their lifetime, so you should not take this lightly.
However, if you break down the journey into smaller, manageable steps and have the right guidance and tools, the journey becomes less confusing. So fear not! Continue reading this article if you want your journey to home ownership to be … FASTER. BETTER. SIMPLER.
Soooooo ... where do you begin from?
Step 1 - Do your Math
The first step is to ask yourself a very simple question … ‘How much can I afford to spend on a property?’ If you don’t have a trust fund to turn to, or haven’t won a multi-million lottery, most mortals will have to rely on a Bank Loan … And banks have a thousand and one conditions for you to consider. But let’s not get ahead of ourselves here. Initially, all you need is an indication of how much you will be able to borrow based on your present income and financial commitments. A home loan calculator will do the trick; but not all home loan calculators are made equal! Check out the YITAKU home loan calculator and affordability tool. This tool will allow you to determine the maximum price of the property you can purchase and the amount of money needed as a deposit - which is typically 10% of the value of the property. So start saving if you haven’t done so already! Here, you might want to check if you’re eligible for the governments’ deposit scheme. Furthermore, with YITAKU’s home loan calculator and affordability tool you can calculate your estimated monthly repayments, the duration of the loan and also calculate the total amount you will be paying, including interest, over the whole period of the loan. Make sure you’re sitting down when you look at these figures!
Step 2 – Talk to a bank and ask for a quote
Doing some shopping around for home loans will surely be of benefit to you. There are a myriad of aspects you should evaluate in order to find the best home loan that suits your needs; such as interest rates, various fees like processing fees, registration fees, notary fees, architect fees, commitment fees, early repayment fees and then there’s the APRC (Annual Percentage Rate of Charge). The APRC is an important factor to consider, as this determines the cost incurred to borrow money each year. If you want to know more about these terms click here.
At this stage the bank will ask you for some documents, usually related to your income and monthly expenses such as pay slips for the last 3 months, latest FS3, Evidence of other monthly commitments (Credit cards, other loans) and copy of identification documents.
Did we mention that the YITAKU home loan calculator and affordability tool can assist you in this too? Apart from the already mentioned functionality of the YITAKU home loan calculator and affordability tool, you will also have a summary of what Maltese banks are offering. This will allow you to have a better overview of what banks are proposing by highlighting some important aspects of a home loan and will give you a head start in finding the ideal home loan for you.
And that’s not all … the YITAKU home loan and affordability tool will take you straight to the next step of your journey to home ownership.
Step 3 - Search for property in Malta
Through the YITAKU home loan calculator and affordability tool, not only you will have access to an up to date database of properties that are within your budget; but you will also have the possibility to contact the seller directly from the YITAKU app! And that’s not all … if you’re a picky chooser you can set up property alerts with your preferred criteria and YITAKU will keep you automatically updated on any property matching your criteria. Hence, making sure you never miss out on an opportunity to purchase your dream property in Malta.
Step 4 – The Konvenju (Preliminary Agreement)
Now that you have found your dream property in Malta, it’s time to sign the preliminary agreement or promise of sale. Here, you’ll need the services of a notary to draft the promise of sale, update the searches on the property you are about to purchase and guide you in this process. It’s always wise to engage a notary who is independent from the seller.
Step 5 – The Architect
Next up you’ll need an architect’s valuation of the property. After visiting the property, the architect will give you an estimate value of the property and the cost to render the property habitable. The architect will also provide a Land Registry Site Plan of the property duly marked, stamped and signed. This valuation will be required during multiple stages of your journey to home ownership, including the application for a home loan.
Step 6 – Time to actually apply for a Home Loan
It is now time to contact the bank and set an appointment to kick-start the process of applying for a home loan. Here, the bank will ask you for the following documents:
· A list of all your bank accounts
· Bank Statements for the last year of your current and savings account
· Declaration of all financial commitments (loans, hire purchase)
· Statements of credit cards limits, overdraft limits, loans and hire purchase
· Copy of promise of sale agreement
Step 7 – Purchase Insurance Policies
6 to 8 weeks before the preliminary agreement is due to expire, as part of the home loan process, the bank will ask you to purchase 2 insurance policies. A building insurance that covers the property you are going to purchase, and a life insurance.
Step 8 – Congratulations!
Once your home loan application is approved by the bank, a sanction letter is issued. At this point it’s time to sign the deed of sale and make you officially a home owner!
Step 9 – The exciting part begins
It’s now time for some important decisions ... it's time to build, renovate or finish and furnish your newly acquired property and turn it into a home. Good luck!
If you follow these steps and use the right tools, you should be able to become a home owner in a FASTER. BETTER. SIMPLER. way.
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