Those interested in an apartment have new priorities. They don't want what they used to

Interest rates are also rising. At the end of September, the average interest rate reached 2.32 percent. Bottom line - loans, which are increasingly high due to property prices, are becoming more expensive for people.

In addition, everything points to the fact that the rise in rates will continue. Analysts expect that by the end of the year it will approach the three percent mark and the average amount of the mortgage loan will reach 3.5 million crowns.

According to your experience, is there interest in buying older properties that are then undergoing renovation? Whether it concerns apartment units or family houses. I believe that older properties are not as attractive as they were a few years ago.

What all needs to be taken into account in cases where people borrow money to buy or renovate an older house or apartment? What are the differences compared to new construction? You definitely have to think about a bunch of other costs associated with this purchase. You never know what you'll find after you start your renovation. Old electrical wiring, destroyed beams in structures, bad insulation, etc. Even if you calculate the costs of the planned event in advance, it almost always happens that the budget is increased by solving problems that you could not have known about in advance. If you are expecting a more extensive renovation and it is even subject to building control, it is almost the same as if you were building a new house. In addition, I know from experience that it is often much more expensive to renovate an old purchased property than to build a new one. Unfortunately, in today's situation, people do not have a choice, and if they want a building site, in addition to looking for a vacant plot, they have to look, for example, for old properties that are located in the place they have chosen.

The resulting cost of housing, including loan repayment, should not exceed thirty percent of the household income.

The problem may be the correct setting of the required amount, or the need to increase the amount. Can such an option be arranged in advance and under what conditions? Practice has shown me that there is practically no "correct" setting. The bank wants a budget and scope of work from you at the beginning. Ultimately, everything comes from this - from the property valuation, which is essential for you in the final possible credit limit, to what you can practically do. The bank does not want to let you go beyond the original items in the budget. If you want to build a roof, but in the end you decide on a garden house, it has a big impact on the loan itself and the value of the property. Once you have a loan and the process is underway, it is complicated to find other resources if they are missing. I try to solve these problems for my clients in advance. If their financial possibilities allow it, we set the budget for higher amounts and borrow more. It is always better not to use the prepared budget without penalties than to look for extra money.

Spouses most often take out a joint mortgage to purchase their own home. People living single or unmarried couples, on the other hand, more often arrange a mortgage for themselves. What are the pluses and minuses of financing the purchase of real estate with two mortgages? The more papers, the more problems. The smaller the loan volume, the worse the negotiation conditions. There are banks on the Czech market that give better rates on higher credit limits. They are not interested in millions of loans, but volumes of many millions. If a couple splits their budget and applies for two smaller loans instead of one larger one, the amount of the single mortgage may not be the same as the sum of the two at the same bank. This narrows down the selection on the market. It seems to me that even in the event of a couple's breakup, which is probably the most common reason why someone shares loans as a precaution, you will deal with the same thing - paying off the share of the loan from the real estate. Unfortunately, I do not see the advantages of two mortgages here.

How does the state mortgage work for young people, specifically the new loan program of the State Investment Support Fund Own housing? How much money, for which properties and under what conditions can be obtained? Can they be used to purchase an older property? This is a product through which the state tries to support young people in acquiring new and older real estate. A huge positive is the interest on the loan, the annual interest rate is at the level of one percent. But that would end the list of positives. Complex administration, documenting every document, which is no longer common with regular mortgages, short repayment period with a maximum loan repayment period of twenty years, while the mortgage loan is also thirty years. For young families, this means paying a higher installment and thus a higher burden on the budget. In the end, the real estate pledge will be the same as in the case of ordinary mortgage loans. These are just a few of the complications that interested parties have to deal with. When we add to this the absolutely ridiculous amount of the maximum possible credit limits, we get a product that, despite the super rate, will ultimately burden the young family much more financially than commonly available credit products. How else will young people buy today's expensive real estate when the state offers them a maximum of two million crowns? They will have to find other ways. To finance with combinations of loans and without real estate mortgage. This is already held by the state fund. I don't think that solving housing with this product is exactly the most advantageous way on the market. It could definitely be set differently and better.

Some business owners and small business owners actually have much more money in their bank account than their official and verifiable income does. Under what conditions and up to what amount can a mortgage be obtained without proof of income? The problem of entrepreneurs has been actively solved for some time. The first option is the banks, which are able to create nice figures from the turnover calculation from an optimized tax return or flat tax return, which will help in obtaining a mortgage and sufficient income. With such mortgage loans, you will end up with almost the same rates as other clients and you will not even be limited by a larger number of your own resources. But if this option doesn't work, you have to look for other options, such as "cooperative financing". The approval and procedure is the same as for loans. The share of own resources is at the level of at least twenty percent, but you do not prove income at all. But it is clear that this benefit is compensated by the interest rate. However, there are cases when you are dealing with housing itself rather than how much it will cost you. I am glad that there are already options on the market.

How to set up a mortgage payment so that it is safe and manageable in the long term? I guide my clients to adhere to two principles that I always try to combine. The resulting cost of housing, including loan repayment, should not exceed thirty percent of the household income. Then you can truly say that you are paying smartly and "safely". In this way, I prevent future problems that may arise, for example, due to an increase in rates. This can result in higher repayments, and if your budget is tight, you won't be able to pay them off and lose your dream home. (According to the monitoring of housing availability by the Golem Finance brokerage company, the mortgage payment now statistically swallows up 55.3 percent of their net income for Czech households - editor's note.) The second principle says that it is useless to pay a lot every month just to pay off the loan earlier and to overpay less. How about trying to extend the loan during its repayment period and put aside the difference in installments? This reduces the mandatory payment and creates a reserve at the same time. This can help you pay off the mortgage early and thus save money and shorten the repayment period.

How to achieve lower monthly mortgage payments? Two ways. The first is the interest rate cut. The second is the already mentioned extension of the maturity period.

What is your experience with reverse mortgages? It is sometimes referred to as a reverse, reverse and senior mortgage or annuity. Does anyone offer it in the Czech Republic? Unfortunately, I have not yet discovered a reverse mortgage product in the form in which it operates abroad. The main prerequisite is that it is offered by a capital-strong bank that clients will trust. At the same time, she will not be interested in robbing clients and will set fair conditions. While this product is widely used in Canada, for example, it is still in its infancy here and we are waiting for a bank to finally start implementing it. I see only positives in him. I also consider it one of the ways to help the pension system and people of retirement age to live proudly and not live off the minimum benefits that the state gives and will give. I am sorry that so far no government has included legislative assistance and the creation of this product in its program. The senior, who was left alone, offers his property to the bank. She will provide him with finance or an annuity for it, or a combination. Thanks to this, the senior citizen will continue to live in his own, even if at that moment already in the bank's possessions, he will have enough money for his needs in the form of medicines, food and travel. Once he dies, the property goes to the bank. I understand that this is a touchy subject. No one wants to talk openly with people about the end of life. However, if we do not start looking for a solution, we will see pensioners who will not even have basic food.

Home insurance After completing the renovation of your home, it is good to think about the back door in case of various accidents. As for property insurance, it is useful to take out home insurance and property insurance if you are the owner. Each of them covers different damages. The simple lesson is: take a house and turn it upside down. What is spilled belongs to the household, the rest is real estate. You can protect your property against almost anything, such as fire, lightning, flood, or an accident caused by other natural elements. Insurance should provide protection against risks such as fire, explosion, water from the water pipes, flood, flood and also theft - theft burglary or robbery, vandalism. Home insurance covers the interior of the house. Specifically, of course, it will be furniture, lighting, valuables such as works of art, antiques, collections, precious metals and stones, as well as payment cards, not to mention cash. Another large group includes household electrical appliances, you shouldn't forget sports equipment or garden and hobby equipment. Insured items should also include consumables, such as cosmetics, toys, as well as food. Household insurance will financially compensate for damages incurred after the destruction or loss of personal ownership of these items. As part of home insurance, you can also receive compensation for damage caused by animals or compensation for expenses for loss of water if a water disaster occurs. Therefore, always be interested in what your selected policy covers. Some insurance companies also offer extended assistance services in case of emergencies, accidents or defects connected with housing. If necessary, you can request the services of a plumber, electrician or locksmith. Legal protection of the client in controversial issues related to housing can also be part of the policy. And the services of an exterminator or perhaps catching wasps or hornets can also be useful. Most services are free up to a certain limit. Real estate insurance, on the other hand, protects against damage that may occur to the real estate as such, such as masonry, windows, doors or floors. When arranging a mortgage, you cannot do without this insurance. But people often only take out a basic insurance policy for the lowest insurance amount. This is enough for them for a mortgage, but in the event of an insurance event, they may be surprised by a low payment that is not enough to compensate for the damage. When setting the appropriate amount of the insurance amount, the so-called catastrophic idea will help you. Think about how much money it would take to completely rebuild if your entire household or house was reduced to ashes after a total fire. As with home insurance, with real estate insurance it is necessary to thoroughly study the contract and the risks that are included in the insurance. It may happen that the property will be insured against strong wind, but not against a gale, and the insurance company will not reimburse us for the damage caused by the gale. By modifying or buying new equipment, you increase the value of your property, so it is a good idea to update the insurance roughly every three years.