The dream of home ownership is something that moves most Brazilians. When preparing financially for this business, many people understand that it will not be possible to obtain the full amount for the purchase of a property and for this reason they opt for real estate financing. However, many still do not understand what it means to borrow money from a bank and what the requirements are for obtaining it. Did you know, for example, that the money ordered is released for a period stipulated by the bank and not as soon as the order is approved?
Thus, it is essential to know all stages of the process, in addition to the interest rates embedded in the total amount to be paid. In addition, it is necessary to know the deadlines and prepare financially for this commitment in your budget since, normally, this is an amount that will have to be paid for many years and its non-discharge represents serious problems for the buyer.
How does real estate financing work?
When buying a new property, whether used or new, it is possible for the buyer to finance his payment if he does not have all the value requested by the property. A real estate financing is done by banks. Thus, financial institutions pay the seller of the property the amount requested by the buyer who must pay the bank to settle the debt.
During the financing payment period the property belongs to the person who made the purchase. That is, all documentation and registration of the property is in the name of the buyer and he is the owner and responsible for the property. However, the property cannot be negotiated until the debt with the bank is paid off.
Real estate financing conditions
Currently, most banks offer financing options and what distinguishes them from each other are their payment terms. Therefore, when deciding to finance a property it is important to research all these conditions and choose the one that best fits your budget planning. Pay attention to interest rates, the duration of the contract and how much of the property value can be financed.
After this research, it is possible to define more confidently how and where the financing will be made. To start the process, it is necessary to go to a branch of the chosen bank and apply for financing. The manager will explain to you what documents are required and the process until the money is released, however, for most banks these procedures are very similar.
Usually the submission of documents is the first step in applying for a mortgage. Among the most common are originals and copies of RG and CPF, proof of marital status and income. The ideal is to confirm with the manager which vouchers are accepted, but in general payslips, bank statements and complete income tax return are accepted. For cases in which the purchase will be made by a couple, it is necessary that the documentation of both is presented.
In the case of self-employed professionals, it is possible to prove income through service contracts, income tax declaration, category union or a Declaration of Receipt of Income made by an accountant. In addition, for those who do not have bank accounts, it is possible to fill out a registration form. This is done with the guidance of the manager and he must indicate the necessary documentation for these cases.
Proving income is very important for the bank to verify your ability to pay installments. This is because, their value cannot be greater than 30% of the gross family income. In addition, you must not have debts in credit protection services. There being no restrictions, the financing is approved.
After analyzing the documentation, the bank conducts the property evaluation. This can be done through a specialized company, or by professionals such as a specialist engineer or architect from the institution itself. Thus, it is possible to confirm the value of the property.
The next step is the drafting of the contract that must be signed by the seller and buyer. This document must be registered with a notary and taken to the bank branch. The credit is released according to the term stipulated by the bank and the seller is paid after this process and the buyer begins to pay the monthly installments to the bank.
Types of financing
There are some types of real estate financing. The first of them uses the resources of the Guarantee Fund for Time of Service (FGTS). The other options involve the Brazilian Savings and Loan System (SBPE) or the option of direct financing with the construction company. Each of them has particularities that need to be analyzed with caution.
For those who do not know how real estate financing works using FGTS resources, it is part of the Housing Finance System (SFH). The values of the property and the financing have limits that can vary from time to time. For this modality, only people with a certain maximum family income can participate and this value varies from region to region. This modality is usually the most sought after due to its low interest rates.
Financing by SBPE
To understand how real estate financing works through the Brazilian Savings and Loan System (SBPE) it is important to know that for this modality there is no income limit. In addition, when the property has a value within the limits of SFH, its interest rates cannot exceed 12% per year.
This is the financing option that offers greater negotiation flexibility. This is because, the construction companies do not impose limits on the amounts financed, income or interest rates. However, this is also the modality that presents the greatest risk to buyers. That’s because, the construction company can finance the construction with some bank. Thus, the property purchased is mortgaged to that bank and if the company declares bankruptcy or does not settle the debt, the financial institution can claim the property to settle the debts.
In some cases, the buyer may settle his property with the construction company, but the property remains mortgaged. Thus, after paying off the debt, it is essential to require the construction company to take the property off the mortgage, if applicable. This proof is called a certificate of real encumbrances and can be obtained at any registry office with only the address of the residence.
This document is very important to protect the buyer. If the company goes bankrupt and the bank wants the property as payment, this certificate is the proof to protect the owner.
Questions and answers about real estate financing
What are the differences between the types of financing?
Before carrying out any purchase and sale transaction it is very important to understand how real estate financing works. Among the aforementioned modalities, it is important to remember that within SFH, banks cannot charge interest rates above 12% per year, but there is a limit on the amount of financing. However, outside of SFH, financed properties may have higher values.
For financing with construction companies, there is the possibility of a more flexible negotiation. This is because it is up to the companies to define the maximum amount that will be financed. However, it is this modality that presents the most risks.
What happens when the consumer fails to pay the installments before the debt ends?
In the event of non-compliance with the contract due to non-payment of debts, the bank may file a lawsuit to keep the property. The next step is to auction the property and the proceeds are used to pay the bank’s debt and court fees. In case of something, this value is returned to the consumer.
For cases in which installments are paid late, it is important to be aware of the fines and interest that are charged per month. The fine and interest may not exceed 2% and 1% of the total debt, respectively.
Typically, the list of documents required to apply for financing includes:
- RG (original and copy)
- CPF (original and copy)
- Proof of marital status (original and copy)
- Proof of income (original and copy)
Real estate consortium: an option for financing
One option for real estate financing is the consortium. This is the best option for those who are not in a hurry to move and are purchasing the first property. In addition, it allows you to split up to 100% of the value of the property, without the need for an entry. Its major disadvantage lies precisely in the time of delivery of the letter of credit. That’s because, some people wait for years before they can really move.
In short, a real estate consortium works like any other. A group of people come together to purchase a specific asset, which in this case, is a property that brings together interested in the business and thus manage to accumulate favorable conditions for the venture . In this way, everyone contributes monthly to a fund for the purchase of that common good. These payments cover the delivery of the residence to the consortium members until all are covered.
The importance of understanding how real estate financing works
Understanding how real estate financing works is very important when planning your purchase. Thus, it is possible to define the ideal entry amount for you to get the ideal financing for your profile and goal. In addition, understanding all the points of the contract with the bank is essential. Financing involves a commitment to part of your budget for many years. Institutions do not accept benefits that exceed 30% of family income and that is why planning financially is very important.
Knowing the payment terms and the total amount of the debt after financing is also important. So it is possible to define how much you can really pay for the property. Regardless of your budget, you can count on the Casa Mineira Imóveis portal to locate the ideal property for your profile. Our search filters allow you to define the maximum value of the property and its main characteristics.