Real Estate Financing [FINAL GUIDE]


Real estate financing exists because not all people who dream of buying their property have the possibility to acquire it with their own resources. 

Thus, most purchases use the famous PROPERTY FINANCING.

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In summary, almost all banks, both private and state-owned, provide real estate financing for NEW or USED properties.

Do you want to know about the new modality of  Financing with IPCA

What types of real estate financing?

Price Table (TP)

This modality is definitely more common in direct financing with construction companies.

In this system, during the first installments, most of the installment refers to the payment of interest.

Over time, interest decreases as it is charged on the outstanding balance. That is, amortizations are increasing and interest decreasing.

The advantage is that the value of the installments will always be the same until the end, on the other hand the disadvantage is that the outstanding balance decreases more slowly.

In fact, the value of the installments is adjusted for inflation and the most used index is the Referential Rate (TR).

Comparing the SAC table, for example, a portion with a smaller value is started, but it does not change. At SAC, the value of the installment starts higher and decreases with each payment.

It is not suitable for those who are very close to the commitment of 30% of their income, as the installments will increase proportionally and will compromise, year after year, even more their "payment" power.


The  Constant Amortization System is known by the market as SAC . The amount of amortizations is constant throughout the loan payment period and the variation is due to the interest that is charged.

This calculation is made in relation to the outstanding balance and the installments will gradually decrease over the term of the contract.

In practice, you will pay larger installments at first, and the interest-bearing debt is paid off more quickly, lowering the total interest.

One of the main advantages is that, over time, you will have smaller shares and the tendency is that your financial power will be greater.

Certainly, if problems occur in the middle of the journey, it will be easier to pay them because the values ​​decrease with each payment.
* Most used system nowadays.


Known as  the Increasing Amortization System (Sacre  ). This modality ends up being a mixture of the two previous ones.
In practice, the installments of this type of loan increase over time, but only up to a certain point, after which they start to decrease.
Also as with price, this system is linked to TR, amortizations increase over the years and interest, consequently, decreases.
The advantage of Sacre through the Price System is that because the installments decrease over time, the risk of default decreases significantly.

But what is Property Financing?

It is when the bank lends funds to the BUYER and “Advances” the payment to the SELLER.

In exchange, you receive a payment in installments from those who are buying, defined bank to bank, which can be made in up to 420 months (depending on the institution).

Consequently, the "Registration" of the property, which is where everything that happened with the property to date is registered, will be in the buyer's name but will be sold to the bank.

Property Financing

The financed Purchase of your apartment or house will have a Purchase and Sale Agreement signed directly with the bank. This  contract with the force of Deed  will be transmitted in full to the buyer when the financing is paid.

What do I need to define before contracting a FINANCING?

First of all, we must understand that this is a long-term project and that it should be analyzed calmly before taking any decision.

The amount of the financing installment can commit up to 30% of your net income for a period that can represent up to 35 years of your life.

In summary, we must consider that this person's financial health must be in good condition.

What do I need documents for the bank?

First the banks ask:

    • ID or CNH
    • Proof of residence, registration data
    • Proof of Income (Payment Payment, Pro-labore, Bank Statements or Income Tax).
    • FGTS documents (If using)
    • Property Registration
    • Property Tax Debt Denial
    • Sellers Certificates
  • Proof of marital status (Birth certificate in case of bachelor), or registered marriage certificate.

Is there a way to “improve” my interest rate?

There are many analyzes that are not clear to who is taking the financing, it depends from bank to bank when calculating, for example, the “Risk” of a customer's non-payment.

This directly impacts the consumer, the greater the "RISK" to the bank, the higher the interest rate.

Contrary to what many people think, there is a standard interest rate but each customer is analyzed case by case and they can get different rates according to the bank account, proof of income, age, among others.

It is certainly advisable to take the loan from the bank where you are already operating your account, as they will have more data on your financial life and, in some cases, will even be able to lower the general interest rate for being a good customer .

What can prevent the financing of the property?

At first there are 3 factors to be analyzed:

1 - According to what we talked about before, the bank will analyze your behavior as a borrower: For example, they will analyze if there is no restriction in your name (and also if within your net income you are able to acquire these installments.

2 - Property: The property situation must be regular with the city hall. The bank will certainly carry out an inspection to check structural problems. If the constructed area according to the area shown in the city hall document. If there was an increase in built area without regularization, among other impediments.

 3 - Sellers: Verification if there are serious legal problems on behalf of the sellers (For example, labor lawsuits), which may fall on the property in the future. These checks are made through the Certificates requested by the bank from the SELLERS.

What types of properties can I finance?

New properties (Never inhabited)
Used properties

Commercial real estate

Building land

What are the Current Interest Rates to finance?

Private banks decided to follow the wave of Caixa Econômica Federal and, less than a month after the public bank cut by 1.25 percentage  points  of interest on real estate credit, and announced new financing tables for the homeowners.

Santander and Bradesco updated real estate credit, both for the Housing Finance System (SFH), for properties with a market value of up to R $ 950 thousand, and for the Real Estate Financing System (SFI), from R $ 950 thousand.

Banco   Santander   announced a reduction in the rate from 9.49% per year to 8.99% in the SFH, and from 9.99% to 9.49% for the Carteira Hipotecária, a system similar to the SFI.

The   Bradesco   down the interest of 9.3% to 8.85% per annum of the SFH, and 9.7% to 9.3% per year in SFI. At Itaú, the rates remain the same, starting at 9 %  per year for SFH, and 9.5% for SFI, according to a survey by the newspaper O Estado de S.Paulo.

Recently, Caixa reduced 1.25 percentage points of interest rates on real estate credit and also announced an increase from 50% to 70% of the used property financing quota.

Is the interest rate the total amount I will pay for the mortgage?

No, the total effective rate (CET) is the interest rate on your loan. That is, right after the risk analysis made by the bank and the calculation of the interest rate, some fees are also inserted, for example:

Insurance : Coverage for death or permanent disability, and for physical damage to the property. The amounts of these insurances are also added to the monthly installment.

- Appraisal fee for goods received as collateral
to contract a real estate financing, the appraisal of the property indicated by you will be carried out. This assessment is a mandatory step and this fee will be charged. For your convenience, the amount may be included in the financing.

- Property financing contract administration
fee the value of this fee, which is related to the financing contract administration services, will be included in the financing installments on a monthly basis. 

What percentage of the property can I finance?

The percentage released from real estate financing depends from bank to bank. It is concluded that institutions define and modify this according to market needs.

For this reason, below is a table updated in April on the Real Estate Market rates.

Itaú Financing  -  Up to 360 months - 82% of the amount can be financed - Minimum value R $ 100 thousand.
Access the Itau simulator here

Caixa Financing  -   Up to 420 months to finance - 80% of the property's value.
Access the Caixa Econômica simulator here

Bradesco Financing  -  Up to 360 months to finance - 80% of the property's value.
Access the Bradesco simulator here.

Santander Financing   - Up to 420 months to finance - 80% of the property's value.
Access the Santander simulator Here.

Financing Banco do Brasil  - Up to 360 months to finance - 80% of the property's value.
Access the Banco do Brasil simulator here.


Can I finance 100% of the property?

If you are considering a purchase of an apartment on the floor (under construction), you normally pay up to 30% of the property's value during the construction period.

Upon delivery, when you pick up the keys, you have the possibilities of the seats above.

Thus, if you have already financed 30% of the property and when you receive the keys, you receive a 70% loan, you will finance the entire property.
It is important to remember that the lower the down payment, the higher the interest that will be paid over the mortgage loan. In this way, plan to avoid future problems.

Can I use someone else to make income?

Certainly one of the most important questions, it can usually be used to compose income for the Acquirer and another person. But it varies from bank to bank.

Generally speaking, banks do not usually impose restrictions on who is making up income. In the list below, you can check some income composition possibilities:

  • Gay spouses, boyfriends or couples;
  • Stepson, stepfather and stepmother;
  • Parents, in-laws and children;
  • Brothers and friends;
  • Uncles and cousins.

First of all, we don't even need to say that all other requirements apply to everyone in the income composition, do we? Therefore, no member can have restrictions on financial institutions.

What are the requirements for those who make up income?

The requirements to obtain financing apply to all members who made up the income.

Therefore, none of them can have any registration restrictions. Also, there are no other restrictions.

However, you must remember that the people included in the loan become co-owners of the property.

So, it's better to think carefully about the people you'd like to share your dream with!

Can I add the documentation values in the Financing of the property?

Yes, most banks include up to 5% of the property's value within the loan to cover document costs.

But it is important to remember that it must be within the income supported by the borrower.

In case of using Guarantee Fund, which documents do I need?

    • Extract from FGTS - Severance Indemnity Fund.
    • Submit a simple copy of the updated statement, with sufficient balance to make the desired withdrawal. Balance updated up to 90 days. The statement must be issued by CEF or issued via the Internet.

      If there has been any previous withdrawal of the FGTS resource, the interested party must justify it, presenting a simple copy of the reason for use.
  • Authorization for FGTS Eligible Account Movement

For those who have already used the FGTS to purchase another residential property:

    • Prove that the property is not located in a neighboring municipality (neighbor) or in a metropolitan region, different from the one in which you live, work or are going to live by presenting proof of address.
  • If you are in the same or neighboring municipality, you work or where you intend to acquire, prove by means of a Certificate of Enrollment that you have already sold the aforementioned property.

Can I finance property with FGTS having another in my name?

It is not possible to redeem the fund if the person using it has a property in the name.

The restriction happens even if there are other owners owning this property.

On the other hand, for those who own less than 30% of the property, there is no problem.

Otherwise, you must sell the property first and transfer the name and then use the guarantee fund.

The second exception applies between the seller and the buyer: if the owner used his FGTS on, for example, a house within a period of 3 years, the interested party will not be able to redeem the guarantee fund for this property.

Of course, if you already have a property in a certain city, the one you intend to purchase cannot be located in the same metropolitan region.

Furthermore, working or residing in the city where the property is located is another indispensable requirement.

Finally, the last rule is not to have active financing in the Housing Finance System (SFH) in any part of the country.

Can I repay my installments?

Debt repayment is a citizen's right acquired by law. Surely you can amortize. You have two possibilities: 

1 - Decrease the amount of remaining installments (Time for settlement will be shorter, but the value will remain as projected)

2 - Decrease the amount of installments (Maintain the term and decrease the monthly amount in installments)

We must remember that, when contracting a mortgage, part of the amount of the installments paid refers to the return of the amount you took as a loan and part refers to interest.

Real Estate Refinancing

In countries like the United States, this modality is well known, but not in Brazil.

In summary, real estate refinancing is nothing more than placing your property as a guarantee of payment, thus reducing the risks to the bank and, consequently, the amount of interest.

Beforehand, for this modality to be used, the client must have a property in the name, remembering that it is only valid for Individuals.

The evaluation of the value of the property placed as collateral will be made by the bank, as well as determining the liquidity of this property in case of non-payment.

Portability of Real Estate Financing

First of all, when we talk about portability, we are talking about the transfer of real estate financing from one financial institution to another.

Thus, the new financing maintains the same value and term as the contract with the financial institution of origin and is exempt from tax on financial transactions (IOF). 

The conditions determined in the first financing cannot be changed such as:

 – Term
– Type of real estate financing (Sac, Sacre, Price)

The only thing that can be negotiated is the interest rate on this new loan. 

A new appraisal of the asset being financed and a Legal appraisal of the Guarantee will be carried out by the Bank. 

However, if the last assessment was issued within a period of less than 300 days, a new assessment by the bank that will carry out the portability is not required.

Questions or suggestions about Real Estate Financing? Leave in the comments below!

I also made a  complete Personal Finance Guide  for you, with all the steps for you to plan and buy your property efficiently!

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Publicado en Real State en julio 08 at 12:42
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