Home financing, otherwise known as mortgaging, comes off as one of the most convenient and achievable ways towards fulfilling your house purchase efforts. A home is an extremely expensive commodity and is one of the biggest purchases of your lives. You may invest all your life savings to buy your dream home, yet still fall short of the expectations you have in mind. But, don’t give into despair because now you can become a home owner with some convenient financing methods; particularly house finance solutions provided by banks.
By undertaking this home financing facility, you can secure your house purchase through easy instalments – you also have to make interest payments to the lender. This amount varies from country to country. A good (and practical) advice is to calculate your monthly home loan payments prior to commencing with the loan finalization. Most modern mortgage calculators can determine a consumer’s monthly repayments, as well as interest rates. The lender can either be the state bank, private financial institutions, or various governmental or non-governmental organisation aiming to provide affordable housing facilities.
This mortgage amount is usually based on the interest rates set by the economic authorities of different countries. Some countries have very low interest rates set by their home financing authorities and offer quite appealing options. In some cases, the government even subsidises lending; leading to negative interest rates. This is largely in countries where the need for lending is low – hence not a common occurrence. Consider the following cases:
- Japan
Japan has one of the lowest interest rates in the world when it comes to home loans. This year, these rates fell below 1% (a historical low for the country) – creating an excellent opportunity for aspiring homeowners seeking home financing facilities. In addition, most Japanese lenders allow foreign residents to mortgage homes in the country as well; with a down payment that begins from as low as 10% of the property’s amount and go up to around 35%.
This down payment also includes various taxes, which are still comparatively quite low. You can secure a repayment period of up to 35 years. In return, you may need to provide repayment guarantees to the lender – an undertaking that you will have repaid your loans in full by the time you reach your 70s.
Japan is quite an appealing place to live and has a mixture of contemporary facilities and strongly-rooted cultural values. It has one of the lowest crime rates in the world, and its culinary marvels are known worldwide. So, mortgaging a home in Japan can be a great idea.
- Switzerland
The hilly and scenic Switzerland is another country which offers low interest rates (below 1% in some case). This is because of the generally lowered Euribor rate; making mortgaging a home here an ideal option. However, Swiss banks are generally quite discerning about their lending practices and will ask for a down payment of about 20% or higher. However, the repayment period options can be quite long, with plans spanning 50 or a 100 years relatively common.
One of the special features Switzerland offers when it comes to home financing is that you can use your private or company pension to fund your mortgage repayments. However, this is only applicable for pensions from Swiss companies and for primary residences, not second homes. If you don’t have a Swiss residency permit, the home loan process will be a bit more complex for you. You will need to get a license from their local cantonal authority and can only buy investment properties for vacation purposes.
With its excellent weather, and legendary welfare system, Switzerland has one of the highest living standards in the world and is a welcoming country.
- Denmark
Remember when we talked about negative interest rates for home loans earlier in this article? Well, here is the perfect example. Denmark’s third-largest bank, Jyske Bank, offer a 10-year home financing scheme at an interest rate of -0.5%. this essentially means that you’ll be getting paid to buy a house. This is a great deal for genuine buyers and is due to the Danish Kroner’s relationship with the American Dollar.
This might not be conducive for investors, but is quite an appealing choice for anyone who wants to live in Denmark and buy a home there. In addition, foreigners have the same rights as Danes when it comes to mortgages. So you won’t have to go through extra regulations when obtaining a loan here, which you can get with a repayment period of up to 30 years.
- Canada
This is where the interest rates get a bit higher, but a home loan is still a viable option due to the opportunities the country presents. Canada is one of the top destinations for immigrants looking to improve their lives, so mortgages are in high demand here. You can apply for a home loan as a non-resident, but will enjoy the benefits of being a Canadian national.
You can expect to receive up to 65% of your desired property’s value as a loan and pay about 35% and above as down payment. Generally, a 40% down payment, with a repayment period of 15-35 years is the rule of thumb when it comes to mortgages in Canada. You will need to get your documents in order and have a lawyer prepare them for you so in order to clear the loan application process.
- Norway
If you’re interested in a home in Norway, keep in mind that you can receive a loan amount of around three times your yearly salary. This can even amount to up to 100% of the purchase price required and can be repaid in around 20 to 30 years. However, you must receive a mortgage approval from a lender before you commence with the house hunt, so that you can find an option that falls within your financial limits.
Norway also offers first-time home loans called start mortgages, which can be obtained from local municipalities – with the terms and conditions dependent on the municipality’s rules and regulations. In addition, the Norwegian Housing Bank will finance home loans of up to 80%, if the home meets a certain set of requirements. Being a Scandinavian state, Norway is a beautiful place to live, and has a diverse population of immigrants. So, a home loan here can be quite an appealing option.
So, here were 5 of the best home financing destinations in the world. You can explore these options and countless more to see what fits your needs best, and live the life you want. Also look into developing countries like Pakistan; where a Karachi house for sale is considered one of the most affordable options in the world. Since mortgages in developing countries come off as relatively new concept, you can enjoy some great introductory schemes.
