Buying a House in Finland: When you buy a home, you either buy a housing share or real estate. Housing shares are houses in blocks of flats or terraced houses. When you buy a different house, you buy real estate. Real estate usually includes a separate house and related plots.
Where to get a house to buy?
When looking for a home, you should be prepared for several months of searching.
The homes are sold by private individuals, real estate agencies, and housing builders. For example, advertisements for available houses can be found online and in newspapers.
Once you find a house that interests you, book a trip and travel with the seller. Sometimes advertisements indicate a time when you can go home and watch. In such cases, you do not need to book time in advance.
Find out about the condition of the house and other matters
Once you find a house that you like, collect all the relevant information on it. In particular, you should find out about the condition of the house.
If you are about to buy a housing stock, find out if a renovation plan has been made at the housing company and if so, what will be the related costs. For example, plumbing renovation can cost the owner-occupied tens of euros. You can get information about upcoming repairs from the manager of the house.
Responsibilities of seller and buyer while Buying a House in Finland
- A home seller is held responsible for any defects in the home for some time after the sale. In the case of real estate, the responsibility of the seller remains for five years.
- As a rule, a home seller must notify the buyer of any known defects in the home before sale. If it is clear that the seller has known about a defect in the house, but has failed to notify its buyer, the seller may be obliged to pay the buyer compensation.
- Before purchasing a home, inspect it for any defects. If you can’t ask for compensation after a defect
- You should pay attention to the defect while inspecting the house; or
- You knew about the defect before buying the house.
- There may also be hidden defects in the house. It refers to damage that no one is aware of. For example, hidden faults often include water damage. If there is a serious defect in the house, which, if known, will affect the sale of the house, the seller is obliged to pay compensation to the buyer.
The mortgage
Anyone can appeal for a debt from a bank. To be given a mortgage, your income needs to be at a level that allows you to repay the loan without problems. Many banks have mortgage calculators on their websites.
These allow you to assess in advance whether or not you will be able to repay the mortgage.
If you are unsure about whether a bank will give you a mortgage, it is advisable to buy a bank and negotiate a loan before buying a house.
The mortgage is repaid, that is, installments are paid once a month. In addition, you will have to pay the bank interest on the loan.
You can ask for offers from many banks and compare them. Different mortgages have different terms. When considering various mortgage options, keep the following points in mind:
- What is the interest rate on a mortgage?
- What amount do you have to return each month?
Keep in mind that if interest rates rise, the cost of your mortgage will also increase. In that event, the monthly payment to the bank will increase or the loan term will increase.
Mortgage Collaterals & Securities
A mortgage usually requires collateral. The house you purchased is usually about 70 percent mortgage. In addition, you need collateral for the mortgage balance. For example, you can arrange for bail by obtaining a state guarantee through your bank.
The state guarantees a 20 percent amount of the mortgage and does not exceed 50,000 euros in total.
Ask a relative or friend to secure a loan. If you are unable to repay the mortgage to the bank, the guarantor will have to pay the mortgage amount secured by it.
However, you will not need a guarantee for your loan if you have saved part of the price of the house in advance, or if you have a property that can be accepted as collateral for the mortgage.
Home buying resort
The state pays interest on the mortgage. Youth are given interest subsidies to buy their first house. It is also offered to those who buy or build a separate house. Read more on the website of the Ministry of Environment.
Transfer tax
You will also have to pay transfer tax while buying the house. If you buy housing shares, the transfer tax is 2 percent of the debt-free value of the house. If you buy real estate, the transfer tax is 4 percent of the debt-free value of the home.
However, if you fulfill all of the following conditions, you will not be required to pay the transfer tax:
- You are 18-39 years old
- You do not have a home in Finland or any other country before
- You own at least 50 percent of the business
- You use the house as your own permanent home.
Bidding
When you are sure that you want and can buy a home, you can bid for it. Bidding in writing is appropriate. For example, the bidding price may be demanded by the seller 5 to 10 percent less than the house. However, the seller may not always be willing to reduce the price he or she has asked for.
A dialect is binding. This means that you cannot cancel your bid. If you cancel a bid, you may have to pay a fine or down payment to the seller. This amount is usually equal to a few percent of the price of the house.
Buying house
If the seller of the house accepts the bid, the agreement is signed at the buyer’s bank. If they use an individual it usually includes buyers, sellers, and real estate agents.
A sales contract is a contract that specifies, for example, the size, price, and condition of a house, as well as the day the buyer stays at the home. The sales contract is usually prepared by a bank or real estate agent. The buyer has the right to familiarize him/herself with the contents of the sales contract before the signing date.
The bank gives the buyer a mortgage and the mortgage amount is transferred to the seller’s bank account.
Down payment
A down payment (käsiraha) is an advance payment at home. The buyer can pay the seller in the preparation phase of the sale. A down payment is usually around three percent of the price of the home.
If your savings are insufficient to make a down payment, you can borrow them from the bank as part of your mortgage.
- Price of an owner-occupied house
- The cost of your living depends on the following:
- The amount of your mortgage
- Size of your house
- Condition of your house
- Location of your home.
- House share
- If you own housing stock, you usually pay
- Repayment and Interest on Your Mortgage
- Maintenance Fee (Hoitowastike)
- Fees for financial costs if the housing company holds the loan
- Water rates and electricity charges
- Possible repair.
Real estate
If you own real estate, you usually pay
- Repayment and Interest on Your Mortgage
- Real estate tax (kiinteistövero)
- Water rates and electricity charges
- Heating cost
- Waste collection fee
- Possible repair.