7 ways to avoid the own contribution requirement!
Do you want to buy a house, flat or plot and plan to take out a mortgage, but you do not have enough money to cover your own contribution? This situation does not have to mean giving up your dreams. There are several ways to buy a property without own contribution. I'll tell you how to do it!
Own contribution
What does the own contribution requirement mean? 15% rule. Norwegian banks in most cases require us to pay 15% of the investment cost. This means that to buy a property for: NOK 1 - you need a NOK 500 down payment NOK 000 - you need a NOK 225 down payment NOK 000 - you need a NOK 2 down payment from the secondary market, a documentation fee of 500% of the real estate sale value applies. This means NOK 000 per million or NOK 375 for a NOK 000 million flat.
5 times annual income
The next rule is that your total debt should not be more than 5 times your income.
7 ways. How to take a mortgage without a down payment
1. Coefficient of elasticity
You can get lucky and avoid the equity requirement with what is known as the elasticity factor. Most banks prioritize people between 18 and 34 years of age. The amount of flexibility is 8% in Oslo and 10% in the rest of the country.
2.Bostart /Leie til eie /Deleie
Bostart Bostart is an offer offered by OBOS for selected housing projects. With the purchase, you become its rightful owner. The big advantage is that you can buy properties at a high discount - usually 10%. In this way, the own contribution requirement is also lower. When it's time to sell the house again, OBOS will have a pre-emptive right to buy the house at a price calculated on the basis of price statistics from EiendomNorge.
Read our next article: Investment in real estate in Norway - How to invest?
If the price of the property is lower than the price for which the property was purchased, OBOS is not obliged to repurchase the apartment. Leie til eie With 'leie til eie' you enter into a lease for your new home for a fixed period of time – say three years. During or at the end of your tenancy, you will be offered to buy the house. The big advantage is that you can buy the property for the price agreed upon when signing the lease. This way you get an increase in value for 3 years "included in the purchase price" - which can be a big discount on the purchase of your home. Deleie Leie til eie consists of co-leasing real estate together with OBOS.
In practice, you can become the owner of 50, 60, 70, 80 or 90 percent of the property. OBOS owns the rest, and you pay market rent for the portion that OBOS owns. This form is therefore suitable primarily for people with high incomes who have not yet managed to accumulate a sufficient amount of their own contribution.
3. Guarantor
Taking out a mortgage with a guarantor means that another person guarantees your mortgage if you cannot pay it yourself. Buying your first home with a guarantor is popular when parents act as guarantors. As a rule, the guarantor guarantees 15% of the purchase price of the property, i.e. the so-called contribution requirement.
4. Private Loan
If you have parents or grandparents with good finances and savings, you can try to enter into a private loan with them to cover part of the down payment. For parents who have saved up, this can be a way to help their children enter the real estate market.
5. Deposit - Inheritance
The possibility of receiving an advance payment from the inheritance of parents or grandparents can also significantly increase your own contribution. In the case of inheritance advances, it is important that the advance is documented in writing in the gift deed and that all other heirs are informed of this fact.
6. Buying a house together with others
Buying a house with someone else can be a good ticket to the real estate market. Whether it's a girlfriend, friends or family, the costs can be shared. Together, you have a better chance of getting a higher mortgage than you could get separately.
7. Government support - Start-up loan
If you had long-term financial problems or found yourself in a difficult life situation, you can apply for a loan to start in the municipality. Start-up loans are most often granted to families with children, the elderly and the disabled.
I cordially invite you to contact me.
Aleksandra Ostrowska real estate agent.
E-mail [email protected]
Mobile: 40754036
Facebook: https://www.facebook.com/aleksandraostrowskaeiendom
