Financing for an off the plan apartment
3 min read
Buying property off the plan is becoming popular among the people because it provides several financial benefits and affordability in the comparison of buying an established property. In the beginning, the buyer has to pay a little deposit, and after the apartment, house, or building, the buyer has to pay the complete amount. Paying your deposit and contract amount on time is very important in the process of buying off-plan because if you do not clear all your payments on one the construction has completed, there are huge chances that the developer will seize your deposit and sue you if the property rate gets down. Therefore, you have to act very smartly throughout the process, but you have extra careful about the financial matters and make sure that you plan your finance properly. Make sure that you follow the following steps to have smooth financial dealing.
Get your finance in order
Property dealing and development is based completely on finance, and you need to be very particular about it. Therefore, when you decide to go for buying an off-plan apartment, make sure that you manage your finance smartly. Pay all your debts and learn what your financial statement is and how much amount you have to borrow to pay the purchase amount. This will also determine your limitation on whether you can afford a specific property with a high market rate or not.
However, you are an investor or an owner-occupier; you still need to know about the market value of the property, and for this purpose, you have to do market research on the property. While doing market research, pays your attention to the current vacancy rate, the value of the location, rental yield, expected future development, and comparable demographic sales that can affect your property purchase.
During planning your finance, never to get to consider the risks that come along with buying off-plan property. Considering these risks will help you to lower the loss rate of money because these risks can seriously damage your finances. Things that you need to consider are DA Approval, a sunset clause, and capital growth. Moreover, if your developer does not have DA approval, then there are chances that your property might not precede on the other hand make sure that developer updates the sunset clause if the settlement is delayed because the developer d does not assure you to update the contract, he may cancel the contract if the construction is delayed.
Off the plan apartment loan
Along with the 10% deposit, you also have to consider other costs as well that include legal fees, stamp duty, property management cost, and many other costs. So make sure that you have sufficient savings, and if not, you have to take a loan for buying off-plan apartments. However, taking a loan from the bank is the best option, but you have to ask the bank for the loan on time. Do not wait for the construction to complete because the bank will not grant you the loan instantly, and if you do not pay your expenses on time, the developer will finish the contract. Therefore, give your application to the bank for the mortgage almost 18 months before the settlement. This loan will balance your finance and help you to buy an off-plan apartment.
Seek financial advice
Investing in property is a lifetime decision, and therefore, you need to be very careful about it because the financial investment can be very proficient for you. On the other hand, if you do not deal with it smartly, it can make you great financial loss. Therefore, if you do not have experience buying an off-plan apartment, then you should seek financial and legal advice from a professional expert.
