A mortgage loan allows the homeowner to borrow in a cooperative housing in the same way as it is possible to borrow in a condominium. You are thus considered as a cooperative with others who own property. For loans in cooperative housing, however, there are a number of things that should be noted. You can read more about this article.
In addition, there is a loan type called interest rate swap, which is specifically intended for cooperative housing associations.
What is a cooperative housing?
In a residential area, as in the case of owner-occupied flats, a one-off payment is paid on the purchase of the dwelling. However, in comparison to a condominium, there is a big difference that you buy a cooperative home in a cooperative housing association. When you buy a cooperative, you buy a share in an association and you pay the amount that corresponds to your share of the association.
In each association, there is a board that is selected among the shareholders, which therefore represents the interests of the shareholders. In particular, the association’s finances and other administrative tasks are taken care of. A cooperative must meet for all members of the association at least once a year. Because it’s an associate you get a stake in, it’s always a good idea to seek insight into the cooperative and its economy before you buy. Getting into a poorly managed unions can cost you some money on the long run, even though the association is cheap to get into right now and here. If the share does not control the economy and takes unfinished loans, it can be of great importance to your future housing benefit.
When buying a condominium, there is also a housing tax payable monthly. The housing fee goes to the cooperative and covers administrative charges, loan repayments, renovation of common areas, etc. Unlike a common condominium, your expenses are not over as soon as you have purchased your property. The monthly expense is comparable to a rental fee of a rented apartment, just paying you for a kind of joint box and not a landlord. On average, the housing tax is also often lower than you find the rental fee for a similar rental apartment.
The price of a cooperative housing is also partly determined by the cooperative. According to the cooperative housing act, the price of a cooperative housing must be determined according to certain methods where the value is calculated. The law contains various possible methods, and here it is up to the association and does not sell personally, with which method they will determine the value of the property. The price is thus determined by certain directives and not always after the concept of supply and demand as other homes. When a shareholder changes the owner, payment is also made through the association, which receives cash from the buyer and passes it on to the seller.
How do I raise loans to a residential property?
As in other words, like other types of home purchase, it is also possible to borrow a mortgage in cooperative housing. There are, however, certain rules that should be known.
When buying a condominium or other owner-occupied property, most of a loan is most often taken as a mortgage loan. Here you take a loan directly in your home in the form of bonds. The interest rate is often more advantageous to the borrower than with the ordinary mortgage in the bank. As a mortgage buyer, it is not possible for you to create such a mortgage, as the property is in fact not owned by you but by your cooperative. A dwelling house is paid in cash, and the buyer is required to finance the amount by taking a mortgage at the bank.
Even though you can not borrow a mortgage where you hand out your property in bonds, you still have the right to borrow a mortgage at a bank where you pledge your share.
If you want to create a mortgage in a unit, you must first have issued a “declaration of access”. This is issued by the association’s board of directors and is proof that you have the right to use the unit. Likewise, you must use a unit residence letter that defines the ownership of the unit association. This can most often be found and printed from the web.
The association is not entitled to intervene if you borrow in your share. When you apply for loans in your unit, you should be aware of what may be written in the cooperative’s articles of association regarding this. The association may, inter alia, have decided that you must raise a maximum of your share, which corresponds to 80% of your unit’s value. If so, of course, you must stay within these articles of association, even if you have the opportunity to borrow more with many of the existing loan institutions.
When you want to take out a loan, it’s always a huge advantage to search the entire market. The banks issue different rates and fees, just as each bank has its terms of the loan. You may acquire an objective advisor who can lead and assist you in the jungle of offers. Of course, you can also use an advisor provided by the bank, but each bank will, of course, prefer to sell its own products and you may easily be misled by various sales techniques.
As with other types of loans, you can obtain offers from banks and banks, and from there, consider your options. If you choose to save the costs of an adviser and find the right loan yourself, you may notice these factors.
The interest rate, fees and other expenses of taking the loan (get a good overview by looking at the loan OPOP)
Is the loan fixed-rate or with a variable rate? Is there a chance that your interest rate will increase significantly over the term of the loan?
As soon as you have found the right offer and decided to borrow, the mortgage letter must be litigated. This is as a disclosure that the bank has a mortgage in your share and to secure your and lender’s rights in relation to the loan. The storytelling is now digital unless it is a matter of particular complexity. For the registration, you pay a fee of 1,660 NOK and 1,5% of the mortgage amount (the amount you borrow from the lender) rounded up to almost 100.
When you raise loans in your unit, it may have several purposes. First and foremost, it can be a decisive purchase loan to finance the payment of your share, as well as borrowing in your cooperative home to renovate, make a new extension or otherwise improve your housing. But, in fact, the lender does not mix what you spend on your loan, and you can easily borrow in your home for purposes that have nothing to do with the home. Accepting loans in your home means only that you provide the value of your home as collateral for the loan.
Therefore, you should also be aware that the lender can make a payment in your home if you do not meet the obligations that were agreed upon when the loan was created. This may be if you do not deduct as agreed or similar. In practice, this means that you no longer have full control over your home. Therefore, you can neither lend your property further nor sell it without the consent of the lender. In the end, the lender may force you to put your stake on forced sale.
When the cooperative borrows a loan
Even if you do not have the opportunity to raise mortgages in your unit, it does not mean that your cooperative cannot. Since the cooperative is the real owner of the property, mortgage loans are an option for them. Similarly, your cooperative can raise other loans for renovations and improvements to the property, etc.
In order to ensure that your home insurance does not rise uncontrollably and generally no loans are taken out, it is always a good idea to keep up to date what is happening in the association. While it may sometimes seem like an irreversible task, it may be of benefit to you and allow you to take care of your rights as a member of the association. Because even though you are not necessarily a member of the association’s board, you also have something to say about relationships that concern you, including the creation of loans. Living in a community-dwelling also means being part of a community where you should take care of both the association and your own interests.