First off, what is the maximum home loan value I can get?

Before any renovation projects starts there’s one very important and obvious step you need to take: acquire the property.

Now unless you’re sitting on a pile of gold, meaning you’re normal folk like the rest of us, in order to purchase any property on this blessed island, you’re going to have to get yourself in a loan.

This is a step you need to take in the beginning of any hunt for your future home. Why? Because you’re pushing yourself through a journey of disappointment if you start looking at houses before you know the maximum amount of loan you can take. 

Some banks have online calculators that help you estimate the loan you can get, however the most accurate way of knowing is by setting an appointment and physically going to the bank. 

There are several banks that offer good loan packages locally, I personally opted for APS because they offered me beneficial rates for the first five years based on an agreement they have with my employer as a staff benefit. Since then I’ve had little room to complain, and I’ve worked very well with this bank.

But of course there are several other banks locally and it would do you well to sit down with several of them to choose the right package for you. The interest rates are no joke and you could end up paying thousands and thousands more than you have to if you don’t do your research well. Other banks I’ve heard good comments about are BOV and BNF Bank.

Are there factors that determine how much I can get?

How much you manage to get from the bank depends on a number of factors:

• How much money you make annually: if you’re employed you need to provide the bank with your latest three pay slips. If you’re self-employed you need to be able to show your Income Tax Return for the past 3 years. In my case the loan was only calculated on my employment as I had only been functioning as a part-time self-employed for 2 years when I requested the loan. 

• Any existing financial commitments you might have: so for instance any credit card statements, other loans you might have, etc.

Other factors will come into play as well, such as your age, your status, if your loan is by yourself or with someone else, any dependencies, any serious health issues etc.

I know how much I can get from the bank, what's next?

Now that you know how much you can get as a bank loan, you can have a more guided hunt where you look at property you can actually afford. 

I remember at the beginning of my search I was just assuming how much the bank would give me, and the online calculators weren’t as accurate as I’d hoped. I spent the first few weeks of my search looking at property that at the end of the day I couldn’t afford. And quite frankly I didn’t want to because I was still in the phase where I was trying to convince myself to go for an apartment against all my personal preferences.

Eventually when my search got more focused I was able to quickly lock down the first home of my dreams and I can’t wait to tell you more about that journey.

Don't forget the 10% deposit...

Apart from all that was mentioned above, there's one major element you need to ensure you have: the 10% deposit. Banks will look at whether you are capable of handling the loan by ensuring that you can pay 10% of the value of the property in advance. This is to be forked out at the promise of sale (konvenju) stage, and kept by the notary selected until the actual contract of sale is signed.

If you're between the age of 21 and 39 and you don't have the 10% saved up, you can also benefit from government support via the 10% deposit scheme. Under this scheme, the bank provides the 10% deposit to you via a personal loan that you would need to pay back over 25 years. Any interest amounts over these 10% are paid for by the Housing Authority. The maximum home value cannot exceed €250k.

Is there any part of the purchase/renovation journey you really want to know about? Send me your suggestion via the contact form here.