You’ve decided that you want to get your own space that you call home, but it seems such a daunting process that you don’t even know where to begin from. Worry not because we’ve got you covered with practical tips on how to make the home-buying process as smooth as possible.
Talk to your bank’s home loan expert early on in the process to establish your maximum loan entitlement. This will help you set your budget and focus on viewing the best properties within your price range. By setting realistic expectations you have a greater chance of making the right move and being happy with your decision.
Inform yourself about the various home loan products on the market and choose the best product for you, including the different options available.
This will depend on whether the property you’re buying is on plan, in shell form, semi-finished or finished state, in need of refurbishment or renovation. The choice of the right home loan also depends on whether it is your first or second property and if you’re buying it for residential, investment or rental purposes.
Budget properly and save more money than you believe you’ll need. Apart from the upfront down payment on the purchase price, which can range from 10 per cent to 30 per cent or more depending on your circumstances, there are additional costs which you need to plan for. These include notary fees, architect fees, stamp duty, processing fees and other ancillary costs that may crop up. Your bank’s home loan expert should be able to guide you to ensure that you will be able to meet these expenses. Your bank will also provide you with all the written information about the whole loan process and the costs involved, including a European Standardised Information Sheet.
View as many properties as you can and be decisive when you find the right property. As soon as you walk into that dream property, you’ll immediately feel at home and get a strong sense that it is the right one. At that time you will need to act fast by negotiating the final price, setting up an inspection by a trusted architect, checking that the necessary Planning Authority permits are in order and signing the promise of sale at the notary of your choice.
The notary will kick off the public searches, but on your part you will need to complete the loan application with your bank. Read the bank’s product information guide to have the complete set of documents ready at hand when you call at your bank to complete the loan application.
Check that the deed of sale has been registered with the Public Registry
Once the loan application is approved, you will be asked by the bank to collect your sanction letter so that it will be explained to you in detail. It is important that you read and understand the conditions of the sanction letter and seek legal advice if you feel the need, before signing.
You should provide a copy of the sanction letter to your notary and immediately start working on supplying the bank with any required security items and meet any other conditions required before the deed of sale and loan can be signed.
Typical requirements would be a life assurance policy for the amount and duration of the loan, which in many instances requires a health check; a building’s insurance policy covering the property to be purchased; pledging of assets held where applicable; provision of documents and other similar requirements. This is a time-consuming process and involves various third parties. Start working early on the requirements to minimise stress and to avoid having to extend the promise of sale unnecessarily.
If you are planning to have some alterations done to the property or the property has any pending issues with the Planning Authority, submit the necessary development applications at your earliest while you’re waiting for the date of the final deed of sale.
Every now and again, depending on the duration of the promise of sale, keep contact with your notary to check whether the searches have been completed or there are any outstanding issues to be ironed out. Usually this period is between three to six months but may also range from one to two years depending on the state of the property and the agreement you reach with the seller upon promise of sale.
A few weeks before the promise of sale is due to expire you should check in with your notary to ensure that the necessary arrangements with the bank and the seller are made and the date for the deed of sale is set. On the day you will call at the agreed location, usually at the bank’s premises, where you will sign the contract for the purchase of property and for the bank loan.
Congratulations! Your dream home has become a reality! From this moment onwards you are the proud owner of your home and can start enjoying your property, adapting the space to your taste and needs.
One final thing to check for during the house warming period is that the deed of sale has been registered by your notary with the Public Registry.
Marisa Said has over 30 years of experience in retail banking, most of which are directly related to mortgages. She is a key trainer in the area of home loans and BOV’s Head of Consumer Finance.
Bank of Valletta offers a whole suite of home loans that are tailored specifically for whichever life stage you’re at.
All loans are subject to normal bank lending criteria and final approval from the Bank. The term of the loan must not go beyond retirement age. Security may be requested including mortgage or other comparable security. Further terms and conditions are available from www.bov.com. Issued by Bank of Valletta plc, 58, Triq San Żakkarija, Valletta VLT 1130. Bank of Valletta plc is a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).