Many people dream of one day being able to finance their own home. Others take things a little further and treat themselves to the luxury of a holiday home. Others still invest their assets – or some of them at least – in bricks and mortar by purchasing investment property.
So there are numerous reasons why people buy real estate. However, buying or financing a property is not all plain sailing. Properties are often advertised publicly, which means that prospective purchasers face competition. These days this frequently leads to a bidding process and a corresponding upward spiral in prices. Evidence that funding is in place – issued by a bank or mortgage financier – is often required in support of any purchase offer.
For those fortunate enough to secure the property for which they have submitted an offer, there are some key questions to be answered without delay. How will the funding actually be made available? How much of their own funds – and from which sources – should buyers contribute? What funding mix makes sense for the buyer’s specific situation in life? What happens if the worst comes to the worst in the event of incapacity, death or divorce? Are capital repayments required? If so, should they be made directly or indirectly?
All this means that new homeowners have various items on their to-do list which they did not need to consider at all back when they were renting. Building or converting a home often entails a number of decisions for which the most sensible approach is to seek professional support.
This makes it all the more important to draw on the right expertise in making the necessary financial arrangements in good time. This is the only way to ensure that what could be very expensive mistakes over the medium or long term are avoided.
When the time comes to arrange funding for a property purchase, we are happy to support and assist our clients in relation to all these issues and more.
Konstantin Wyser, Partner
Leitung Financial Planning