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Financing your dream home into reality
29 Apr 2019
The build-up to the signing of a contract over a property ushers with it plenty of stress and excitement.  Apart from thinking out the ideal layout of a dream home or its perfect decor, the buyer needs to take a number of more mundane but highly critical decisions.  In this first article of a two-part series we will consider financing options that one needs to think about before taking the leap.

Demand for real estate has never been so strong, driven mainly by limited land, population growth and steep increase in the cost of rent.  Strong inclination of the Maltese to buy property as a long-term investment, coupled with lower interest rates on loans relating to property finance continues to push up the demand.  This is compelling would-be-homeowners to scramble for the best property at the best price.
  
Consumers actively seeking to buy property would typically be in one of the following life stages:
- In their mid-twenties to early thirties, living with parents and seeking to buy their first home
- Seeking to stop renting and settle down in a permanent residence
- Investing in further property, other than their first home – a garage, a parcel of land, a holiday home or another property to rent it out 
- Downsizing because the family status has changed or the kids have left the house

Whatever the reason is for purchasing property, it may be that one is unable or reluctant to finance the property entirely from their own funds.  It might make more financial sense to hold on to savings and investments and instead opt for a home loan. Although carrying a home loan until retirement age is not something one would be looking very forward to, there are numerous advantages to such a choice. It may be practically impossible to save enough money to buy a property in cash; the return on one’s investments could be higher than the cost of a bank loan or one may feel more secure in the knowledge that own savings are available for whatever the future may bring. 

Whichever the case, the peace of mind of taking up a loan is that when banks grant a loan, it means that one has the sufficient means and capability of repaying it without suffering undue hardships.  In fact the main reason that banks ask a million and one questions about customers’ revenues and expenses is to ensure that loan repayments are not to the detriment of their quality of life.

Considering the long-term relationship that needs to be had with the bank, it is very important that the choice of bank is not just based on the interest rate but on other important factors, such as:
- Range of services offered by the bank and how it can help one achieve financial success in the long-term
- Strength of its financial position and long-term rating and stability
- Accessibility through its branch network, ATMs and online channels
- General attitude towards its customers, public sentiment towards the bank and its core values

Customers choose a bank that can help them achieve their financial goals, a bank which understands their requirements at various phases through life and provides the necessary support all along. With ever increasing regulation on all types of bank transactions, it is crucial that customers and banks build long-lasting relationships based on trust.  With the choice of bank, the first step to a dream property is complete.

Bank of Valletta offers a whole suite of homeloans that offer best value to customers and are tailored specifically to meet their requirements at each life stage.  For more information about BOV Home Loans, customers can set up an appointment at any BOV Branch by calling on 21312020,  visit their nearest Branch or check out www.bov.com.  

Marisa Said has over 30 years of experience in retail banking, most of which are directly related to mortgages, she is a key trainer in the area of home loans and BOV’s Head of Consumer Finance

All loans are subject to normal bank lending criteria and final approval from the Bank. The term of the loan must not go beyond retirement age. Security may be requested including mortgage or other comparable security. Further terms and conditions are available from www.bov.com.  Issued by Bank of Valletta p.l.c., 58, Triq San Żakkarija, Il-Belt Valletta VLT 1130.  Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).

This article was first published on the Sunday Times of Malta 21st April 2019
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Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap.370. of the Laws of Malta).