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Tips for First Home Buyers and Their Loan Options
Updated on: June 22, 2022, 1:04 a.m.
Published on: September 18, 2017, 5:25 p.m.
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Tips for First Home Buyers and Their Loan Options


If I was considering buying a house with a Home Loan, what should I do?  

There is always a first time for everything. Buying a house for the first time can be challenging, as the process will be new and you will need good advice and guidance to collect all the right documents to ensure that smooth processing of your loan application. Buying a house or property is a big investment for many Papua New Guineans, and takes a good amount of reasoning, planning and commitment. 

But if you have come to the point of making that choice of buying a property, here are a few tips that can help you go through, with your quest to own a property for the first time.

 
Plan for unexpected expenses
While property/house shopping, it is good to have extra funds put aside for additional expenses. If you are considering buying an existing property, that will need renovations, then you will need a quote from a contractor for the renovations. If you are planning to buy a brand new property, you may have other expenses that will required funds to assist. Every home buyer will have different requirements, so the extra savings and funds available can be helpful for you. Having additional funds available will help get through the initial stages of putting together your Home Loan application.
 
Letter of Sale
It is advisable that as soon as you find a property that suits you, always ask for necessary proof of ownership from the landlord. A copy of the title is one of the key documents that you will need to have in order for you to buy the property. If it is a new property, make sure that the landlord writes you a Letter of Sale indicating the amount that he will sell the property to you. You should also write a letter to the landlord to accept the offer.
Having these documents already assembled will help accelerate the processing of your loan application.

⦁ Complete a Loan application form; 
⦁ Letter of confirmation of employment & remuneration from current employer; 
⦁ Letter of offer from the customer confirming the purchase price and copy of the state lease; 
⦁ Letter of acceptance form the vendor; 
⦁ Evidence of 20% equity contribution by the customer; 
⦁ Super ID and copy of the latest statement; 
⦁ Copy of Driver’s license/Passport, NID card;

⦁ Salary Deduction Authority

Your Home Loan application and pre assessments

When trying to apply for our home loan, it is always good to enquire for information on the pack before lodging your application. A Loan officer can help you do an assessment of your loan application before you submit the application and give your guidance of the loan application process.

It is always good to find out if you have all the required documents before submitting the application. Always ask the loan officer to confirm that all the appropriate paperwork in order before the application is lodged.

Understand the various loan options

It is important that customers understand the various Home Loan Products offered in the market.

Not all loan products are suitable for one customer, but each customer needs to understand the product before making a commitment.

Every home buyer has their own unique financial situation and it’s important to understand which type of loan best suits your needs.

For those curious about BSP’s First Home Ownership Scheme,
below are few features to consider:

Because the loans are intended to finance affordable housing for families who have never before owned a home, the loans have the following features:

⦁ The loan amount is capped at K400, 000.
⦁ The interest rate is fixed at 4%.
⦁ To keep payments accessibly low, long loan terms of up to 40 years are available.
⦁ There will be no bank charges or fees.
⦁ Early repayment of the loan will not be penalised.

You may be curious about how you can source your 10% equity?

BSP has also offers an option for young workers to buy homes using their superannuation at an interesting 10% equity rather than a 20% equity which is a standard requirement offered by banks.

The equity can be sourced from personal savings, stocks, bonds, term deposits, and proceeds from sale of personal property, Superannuation assistance (housing advance) and assistance from employer by way of Home Ownership grants. 

Click here to contact BSP.

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