After a decade of stagnation, the housing credit in our country is now in a development phase with converging estimates that have been made by competent bank executives and have seen the light of publicity raise the new loan disbursements in this sector to 900 million euros by the end of year.
The interest of households, as bank executives have pointed out in their official presentations, is even greater, but the long disbursement time of a mortgage loan that in 2020 exceeded 4 months is one of the deterrents. Time that is estimated to be drastically reduced as the market and all relevant services involved (public services and courts) now return to normal after the restrictive measures imposed due to the pandemic and the gradual digitization of proceedings.
The average home loan currently ranges between 70,000 – 90,000, seven out of ten applications are approved, while the borrower’s own participation should amount to about 25% of the value of the property.
But what are the basic steps in getting a home equity loan, what should a prospective borrower need to know in order to reduce disbursement time? What are the main problems? These and other questions are answered by competent bank executives contacted by – :
The basic stages of getting a home loan.
The process of getting a home loan includes the following basic steps:
1. Apply for a loan
2. Financial Pre-approval
3. Technical and Legal inspection of the property
4. Signing the purchase contract with the seller
5. Final Approval
6. Signing of the loan agreement
7. Pre-registration of the property
8. Disbursement of the loan
What are usually the problems that delay the process
The problems that are usually found in the process of buying the property and are often causes of delay, are identified in the following:
– Incomplete financial data and uncertainties of income and liabilities when assessing financial pre-approval.
– Delay in finding the property to be purchased or changes of interest property during the process.
– Deficiencies in the required supporting documents of the property.
– Problems of technical and legal nature of the property (arbitrary sections, discrepancies in the documents, problems of identification of the property, encumbrances on the property, etc.). The most significant delays are observed in solving these problems.
– Procedure for signing a purchase contract and processing tax liabilities.
– Time consuming process of transferring purchase contracts to the local Cadastral Offices / Mortgage Offices.
What can the prospective borrower do to alleviate these problems:
1. In the initial interview with the bank consultant who chose to state all the details regarding his housing need, his income situation, all his obligations, as well as the amount of value of the property he wants to buy.
2. Documents for the financial pre-approval: The timely and correct submission of the supporting documents helps the borrower to save time and avoid additional actions. Several banks on the websites state the supporting documents, while they are also given in the branches.
3. Financial pre-approval in about 3 days: Within the period of about 3 days, the banks inform the customer based only on his financial data for the maximum loan amount he can receive. Based on this he can more targetedly find the property he is interested in.
4. Find the right property soon: The process can be speeded up if the borrower has found the property he is interested in buying as soon as possible. It is helpful for the buyer to further investigate their choice for possible technical problems (eg arbitrary parts or area discrepancies) or legal burdens.
5. To properly collect the supporting documents of the property.
6. Cooperation with the engineer – Value of the property. It is important for the borrower to set the appointment for the technical inspection of the property as soon as possible and after first making sure that he has the necessary supporting documents for the property. It is noted that the value of the property as it will be estimated by the engineer, is important in determining the final loan amount that the customer can receive.
7. Signing of a purchase contract and procedures. The time required to complete the process of signing the purchase contract, the settlement of tax liabilities usually mitigate the total processing time of the application.
8. Signing of the contract. It is important for the borrower to know that based on what is defined in the Community Mortgage Directive (Law 4438/2016), it is mandatory to pass at least 5 days from the Final Approval to the signing of the contract, as a period of study of the contract by the borrower.
9. Pre-registration and issues with land registry / mortgage office.
Despite the fact that we are very close to the digitization of the Cadastral procedures and in a short time all transfers of titles will be done digitally, today there are significant delays which became much more intense due to the pandemic crisis, in local Cadastral Offices / Mortgage Offices. Note that in some cases a simple purchase contract transfer has taken a year to complete. The borrower through his lawyer should investigate the delayed version of the Land Registry / Mortgage Office that the transfer will take place, and in case it may be long to inform the Bank. In addition, he can obtain the supporting documents regarding ENFIA electronically through myaade.gr and request the supporting documents for pre-registration through ktimatologio.gov.gr.
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