Buying your own home is the dream of many Brazilians’ consumption. But, to do so, it is necessary to learn to save and to plan well before entering into a loan that can last 30 years and commit up to 30% of the income during this period.
After all, to take down most of the financing it is necessary to have 20% of the property’s value in hand. This means BRL 50,000 for a BRL 250,000 loan, BRL 100,000 for a BRL 500,000 loan, and BRL 150,000 for a BRL 750 thousand loan, the ceiling of the amount accepted for the Financial System of the Housing (SFH).
- 1st installment: BRL 2,135.05
- Property Value: BRL 250 thousand
- Entry: BRL 50,000.00
- Total effective cost (year): 10.34%
- Required income: BRL 7,116.83
- Term (months): 360
- 1st installment: BRL 4,228.51
- Property value: BRL 500 thousand
- Entry: BRL 100 thousand
- Total effective cost (year): 10.17%
- Required income: BRL 14,095.02
- Term (months): 360
- 1st installment: BRL 6,345.09
- Property value: BRL 750 thousand
- Entry: BRL 150 thousand
- Total effective cost (year): 10.16%
- Required income: BRL 21,150.30
- Term (months): 360
- 20% of a BRL 500,000 financing corresponds to BRL 100,000, not BRL 150,000
“The ideal, the beautiful, the wonderful thing is to save money to buy it in cash,” says financial educator Marcos Silvestre. After all, those who have the resources at hand get good discounts. However, as this is a reality for few, opting for real estate financing is a good deal, according to the educator.
“Those who have access to the Housing Finance System (SFH), get interest rates of around 8% a year. If you discount inflation, in practice, the buyer will pay 2% interest a year to buy their own home. And, if you can use the FGTS, even better.”
Even those who do not have access to the SFH and use the mortgage portfolio can get an advantageous deal, according to the educator. “The interest on this portfolio usually rotates around 9% to 10% per year. Deducting inflation, the interest would be around 3% to 4% per year, in practice,” he says.
Marcelo Prata, president of Canal do Crédito, affirms that, even with a reduced interest rate in relation to other lines of credit, this is financing that will last a very long period and consume an important part of the income.
Therefore, the ideal is to add as much money as possible to make a down payment and thus reduce the term of the loan and, consequently, the interest.
See, below, 10 tips from the two experts to plan financially for the purchase of your own home:
1) Save up to 20% of the property’s value. The first step is to save money to make a down payment on the financing since most credit lines allow you to finance up to 80% of the property’s value. Money should be stored in a low-risk investment such as savings or fixed income funds.
2) Save 30% of your income. Thus, the future buyer is already used to living without this portion of their budget, which will be committed for up to 30 years, depending on the financing term.
3) The more you save, the less interest you will pay. With a good down payment, the financed amount will be lower, reducing interest payments.
4) Beware if you are starting your career. Marcelo Prata, from Canal do Crédito, says that there are times when it’s better to wait a while to buy your own home. An example is the professional in the ascension phase, subject to travel and moving to another city or even to another country. “In this case, buying a property may limit professional capacity.”
5) Who wants a house? Starting a new life in marriage and taking on high funding for a long period are two very stressful situations, says Marcelo Prata. Another factor to consider is whether the couple intends to have children. Buying a small property may mean having to move in a short time
6) If you live with your parents, take advantage of the financial slack to save. Even if the parents don’t want to, the young person should plan to give down property in three or four years. Marcos Silvestre recommends that the young man offer to pay some bills at his parents’ house, to get used to the new costs that will be incurred when living in his own house.
7) Consider that the house brings additional expenses. The financing of the property can compromise up to 30% of the income. However, with a house, the bills for water, electricity, telephone, property tax, insurance, condominium, food expenses also come. There are many expenses that the future owner needs to be financially prepared for.
8) Save money for deed and documentation expenses. In addition to the bank’s papers, the buyer will also have to pay the ITBI (Tax on Transmission of Real Estate), whose rate varies according to the municipality; notary office, and financing costs, such as property valuation; legal analysis of the documentation, among others. These expenses usually represent 4% of the property’s value, according to Marcelo Prata.
9) Assess the cost of living in the region you are going to live. The neighborhood directly influences your budget. Living on the outskirts or in the sophisticated region results in a big difference in spending on food, clothing, and transport. Consider this cost.
10) Financing is usually more expensive than renting. Those who rent must be prepared to pay more for their own house. Marcos Silvestre says that the typical installment of a property loan is usually 1% of the property’s value, while the rent costs, on average, 0.5% of the property’s value. “In other words, whoever pays rent will not exchange six for half a dozen in the financing, but six for a dozen,” he says.