Borrowing to buy.
WHAT OPTIONS TYPICALLY EXIST
Mortgage lending, where available Commercial lending against the property Cooperative and contributory arrangements Instalment purchase from developers Personal savings
WHAT TO ESTABLISH ABOUT ANY FACILITY
The total cost over the term The rate, and whether it varies The term Fees What happens on default Whether early repayment is permitted
WHY TOTAL COST
Property finance over long terms costs substantially more than the amount borrowed.
WHAT TO CALCULATE
Whether the rent covers the repayment.
WHAT TO ALLOW FOR
Void periods Maintenance Rate increases, where variable
WHY
Financing a property that only works at full occupancy is fragile.
WHAT DEVELOPER INSTALMENT ARRANGEMENTS PROVIDE
Access without conventional lending.
WHAT THEY RISK
Paying for property that is not delivered.
WHAT TO ESTABLISH
The developer's record What documentation you receive at each stage What happens if the project stalls
WHAT TO REQUIRE
Documentation proportionate to what you have paid.
WHY
Paying substantially with nothing in your name is the commonest way buyers lose money.
WHAT TO VERIFY ABOUT ANY DEVELOPMENT
Title to the land Approvals for the development Previous completed projects
WHAT TO BE CAUTIOUS OF
Prices substantially below the area Pressure to commit quickly Payment to individuals rather than the company
WHAT TO KEEP
Every receipt and agreement.
