What is more profitable: a mortgage or an installment plan? Let’s consider in more detail.
Installment is a form of payment when buying a property, when the owner does not pay immediately, but in portions. This method of payment will help out if there are not enough funds for the purchase. This is especially beneficial for those who live in a rented apartment – you can live in your own house and have to pay monthly rent.
Installment is divided into two types: mortgage (bank) or internal (from the developer). Each has its own benefits.
Mortgage
It is a mortgage loan from a bank. A financial institution, as it were, lends you the missing amount – while the purchased property, although it is registered in your name, remains pledged to the bank. You cannot fully dispose of it until you close the debt specified in the contract.
One of the advantages of a mortgage is that payments can be stretched over a long period – usually such a loan is issued for 3-15 years. All this time, the owner is obliged to pay small amounts to the bank on a monthly basis on a fixed day. For some clients, the obstacle is that some banks do not give “go-ahead” if you do not provide a number of documents – this is necessary to make sure that the client is solvent.
How to calculate a mortgage
The bank adds a commission to the value of real estate and divides the amount received, for example, by 8 years (or 96 months – it is considered not in years, but in months). Please note that the amount you pay to the bank will be much higher than the original value of the property. In order not to miss these details, carefully read the contract before signing.
Getting a mortgage in Georgia is a little easier than in other countries. It is enough for the bank to provide a passport, an extract from the Public Register on the acquired property and, in some cases, a certificate of income. These rules apply to both citizens and foreigners. The only difference is that according to the law, the bank has the right to issue 70% of the property value to non-residents – the remaining 30% must be paid as a down payment. Mortgages without a down payment are usually not issued, however, financial institutions offer various registration options in order, on the one hand, to satisfy the interests of the client, and on the other, to secure income.
From the developer (without the participation of the bank)
This type of payment is also called internal installment. It is issued for a short period – usually for 1-3 years, usually until the end of construction. The main difference from a mortgage is that in this case documents confirming the source of income are not required. Developers with whom Sea Inside cooperates offer interest-free installments.
How to calculate installments
To get it, you need to pay an initial fee – about 20-50% of the value of the property (the developer sets the share himself). Then the cost of an apartment or apartment is simply divided into equal parts, which must be periodically transferred to the construction company. The peculiarity of this type of payment is as follows: since the duration is shorter, the amount of the monthly payment is much higher than with a mortgage. However, a definite plus is the absence of commission interest, that is, you don’t have to overpay anything – this is what attracts investors.
Georgian Developers Association Sea Inside sells apartments by the sea with any form of payment. Contact.
