If you want to buy a holiday home, now is the time to hit. The interest rate on a fixed-rate loan has fallen sharply in recent years, so you can buy a holiday home today and get far more value for money than before. In addition, the parliament has recently passed a new bill which makes it cheaper to borrow money for the purchase of a cottage. But what should you be aware of when buying a cottage? We have put together a number of good tips and tips that you should follow when investing in a holiday home.
Financing of cottage
The purchase of a holiday home is financed with a mixture of mortgage loans and bank loans, just as you know it with the purchase of a year-round house. The Parliament has just decided that from May 1, 2017, future cottage owners can borrow 75 percent of the value of the cottage in a mortgage institution, so far only 60 percent of the value of the cottage in a mortgage institution has been borrowed. So it has become cheaper to buy a holiday home if you do not have a large savings. If you have a residual value in your full-year residence, the residual value can be used for partial financing of the cottage, so that you get the low interest rate level and avoid having to take out bank loans.
The new law means that with a loan of USD 1 million, you can save between USD 300-600 a month after tax, by financing 75 per cent of the cottage purchase with a mortgage. Today, the fixed interest rate on a 30-year mortgage is down about 2 percent, while the interest rate on several of the floating-rate mortgages is down to loans. The greater the interest rate risk you run, the greater the savings will be.
Here’s how to spot a bargain
As with all other types of home shopping, location is the most important and deciding factor for whether or not the cottage is a bargain. Lands near the coast and grounds with a view will always be the most attractive grounds, and are a good start to a good trade.
After that, one should look at the condition of the cottage itself and the material in which the cottage is built. Many dream of a small cozy wooden house, but do not realize how much work it takes to maintain a wooden house. The woodwork must be painted every five years, so that it is best safeguarded against wind and weather. If you want less maintenance work, you can advantageously buy a house built in brick or gas concrete, since it requires much less work.
Would you like to know more about how you can generally save money?
A third thing to look for is the heat source and how the house heats up. This is especially important if you want to use the cottage during the long dark and cold winter months. Electric heat is expensive and will require large expenses in the long run, while a heat pump is cheaper to heat the house with but expensive procurement. A wood stove is cozy and nicely warms up the space in which it is located, but the remaining rooms are more difficult to heat with a wood stove. In addition, the costs of firewood must be included, which can well be a costly affair through the many winter months.
The exterior walls and the foundation
Also, always remember to check the exterior of the house, where you should keep an eye on the roof. Check the roof for any cracks and loose sheets or if the roof has begun to crumble. If major roof repairs are to be done, it can take a long time and run into many thousands of dollars. Also check the exterior walls for any cracks or damage. If the house is built of wood, you should check for sponge and rotten wood. For this you can try to insert a screwdriver through the tree down to the ground. If it goes through the tree, the walls are dumped and there may be a major renovation work behind. The same goes for the foundation of the house. If the house is built on piles, you can risk the piles, which in turn is expensive to repair. Therefore, always go for a house built on a cast foundation.