Step 6: Arranging the Required Funding

For many people who are buying a home, the real estate is the main consideration in the transaction and the financing gets much less attention. As long as they can get the necessary funding to buy the property, they’re happy. However, this type of attitude can be very costly in the long-term and should be avoided.
Whatever property you buy and however much you borrow, you will be repaying the loan for many years and a lot of money is involved. In fact, most people would be shocked if they added up the amount of interest they pay during the term of a loan. It follows, therefore, that even a slight reduction in the interest rate you pay or an improvement in the terms can make a significant saving in the total amount that’s repaid.
Because of the large sum involved and the long repayment period, it really is worth spending some time finding out what’s available, researching the subject and checking out a range of options. That way, you can be sure you’re getting the best deal and may save a considerable amount of money over the term of the loan.

Getting a Loan

There are various banks in Malta that will provide you with a loan, or at least find one for you, and some of them are featured on this website. These organisations include commercials banks, insurance companies, loan associations, and real estate agents, who may also be able to provide advice and information. This website even has loan calculators so that you can work out what you can afford and how much your repayments will be.
It is well worth approaching several of these organisations because the more options you look at, the more chance you have of finding the best deal that’s available. You may also be able to organise loan pre-approval, as described at step 3, so you have evidence of financing when you make an offer for a property.
You will need to complete a loan application and provide supporting documentation as proof of income and expenditure. This documentation will include recent pay slips (or tax returns if you’re self-employed), rental agreements and loan statements.

Finding the Right Loan

When looking for home loan, you’re trying to find one that is affordable and costs the least in the long-term. There are a large number of variations available and so making your choice can take some time. However, there are several factors that will influence the eventual outcome.
If you’re a first-time buyer, you might qualify for a simplified product with reduced charges and a lower rate of interest. Lower repayments can also be secured by making a larger deposit, although this will of course depend on the amount of cash you have available.
Some loans do offer a fixed rate that is guaranteed for a period so you know your payments won’t vary during that time. Others allow low deposits, although you may be required to take out insurance to protect against default if the deposit is below a set percentage.
The loan amount you are offered and the interest rate charged may depend on your credit rating. As detailed at step 1, you need to ensure you pay all your bills on time and in full in the twelve months or more leading up to the loan to make sure it’s as good as it can be.
If you do the research and put in the time, you’ll get the best terms and rate and may save a lot of money.