Buyers are startled by interest rate traps and fees
Using financial leverage to buy a house is an option for real-life investors and home buyers. However, in reality, many homebuyers don’t realize until they sign a contract that the monthly principal and interest after the preferential period is not as cheap as they expected. In particular, the fees they receive are incurred and accumulated, causing them to fall into the situation of “interest on top of interest”.
The story of Ms. Tran Sam (Hoai Duc, Hanoi) is an example. In March 2021, Ms. Sam and her husband closed a house in Ha Dong, Hanoi with the price of 2.3 billion VND, with an area of 34m2 and have a property on the land of a 3.5-storey house. Regarding the financial problem, Ms. Sam and her husband only have 800 million dong of capital, equivalent to about 34% of the value of the apartment. The rest of the money, Ms. Sam plans to borrow a bank loan.
“About 3-4 years ago, it was quite difficult for banks to disburse parallel to real estate. Currently, buying real estate or land for buyers who need to use bank money has become easy. If If you have a stable income, no bad debt, no other debt, the loan application will be approved quickly.On average, it only takes about 2 days to prepare the application and 3-5 days for the bank to have a loan decision. capital. Some banks will take 2 days for a third party to appraise real estate. For banks that have a self-appraisal department, the procedure will be shortened by 1 day,” said Ms. Sam.
According to Ms. Sam, the bank will open an account for the seller. On the notarization date, there will be a representative of the bank to sign the 3-party contract. The disbursed money will be transferred to the seller but blocked. Until the new pink book is released, the new amount will be blocked. “This both ensures the safety of the buyer because as such, there is rarely a situation of fake pink books, or unrelated disputes.”
However, this woman also said: “Banking procedures are really quick and convenient. But what my wife and I are somewhat frustrated with is the interest and fees.”
According to Ms. Sam, shared: “A bank offered me an interest rate of 7.8% for the first year. In the second year, the interest rate will be equal to the 13-month savings deposit rate plus 3.5%. The counselor told me, the second year interest rate will fluctuate around 10.5% and introduced, this is the cheapest offer in banks.
However, when I took out a loan, I discovered that there were too many fees incurred. The first is the house appraisal fee that costs more than 2 million VND. Then there is the fire insurance premium for the house, equivalent to 1% of the house value. In addition, the loan insurance premium, the cost of buying insurance, average 20 million VND/year. By the time we are close to the date of preparing to sign the contract and notarize the loan, in addition to the fixed costs according to the State’s regulations, we will have to spend 2-3 million additional external fees.
Thus, if I borrow from this bank, in addition to the monthly principal payment, on average, I lose 2-3 million additional fees each month. In addition, after the first 1-2 years, the bank also collects a fee for asset management. As for the interest rate incentives, at first, I mistakenly thought that the 18-month savings deposit interest rate would be about 5-6%. But as it turns out, this interest rate is calculated for billions of deposits, ie 7-8%/month. If plus the margin of 3.5%, the monthly interest payable is 11.5%, not cheap. Currently, my wife and I plan to transfer the red book to another bank. But within the first year, the penalty fee is up to 3.5%.”
Mr. Nam, a leader of a real estate business in Hanoi, candidly shared that easy access to bank loans has helped homebuyers easily own apartments. However, in reality, buyers need to refer to the policies of different banks.
“There are banks that lend easily, the procedure is simple, but there are banks that are strict about paperwork. Each side will have advantages and disadvantages. Homebuyers should be careful with the interest rate trap that credit officers offer. In addition, do not think that the low first year interest rate is an advantage, but need to learn to consider the interest rate from the floating year. In addition, homebuyers need to clarify the costs that will be incurred during the loan application process and The interest rate is floating because normally, some credit officers will not advise but wait until the signing to start announcing”, Mr. Nam said.
The leader of the real estate business added that in the context of high inflation risk, interest rates could increase dramatically, so homebuyers need to consider carefully.
at Blogtuan.info – Source: Kenh14.Vn – Read the original article here
