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Advice for First Time Buyers

Buying your first home is both a thrilling and frightening experience, but imagine if your first buy was on one of the Greek Islands! Not only would you have to find your way through the maze of Greek paperwork and legislation, but you would also need to adjust to life in a different country with a language and culture alien to your own. Most matters linked with buying a property are not unique to first time buyers, but if this is a process you have never experienced before, then you are likely to feel like you are fumbling in the dark. 

The Importance of First Time Buyers

Every housing market loves first time buyers and financial institutions constantly strive to attract them to keep the mortgage market from stagnating and to develop their profits. Lenders hope that when they secure a first time buyer, the buyer will use their services again when they come to buy their next property and in the long-term, it makes more economic sense to keep existing buyers than to have to find replacements.

Research your Location

Before you even embark on buying a Greek Island property you need to research the islands and choose the one that best suits your needs. Consider what amenities you need to enjoy being there. Choosing the most attractive property for your money is simply not enough- if you want a social life then it’s no good living in a tiny village, however if you are looking for peace and quiet and the chance to integrate with the locals then this choice could be perfect.  You also need to consider how easy it will be to get to and from the island if you are using the property for holidays. You also should think of how well the local transport will serve your needs and what is on offer on the island during winter should you decide to make it your permanent home.  

Setting a Budget

Before you look for your island dream home, you need to calculate how much you can afford to spend and what you intend to use the property for. Be realistic about what you can afford to pay out in mortgage fees and how much you can afford to borrow and consider the downside of what you would do if you could no longer afford to pay your mortgage – relying on a booming housing market in today’s climate is no longer an option.

Take a Friend

If you are buying a property on your own, then ask an experienced friend or relative to help you. Two heads are always better than one especially when it comes to viewings. A viewing trip can involve seeing numerous homes in a short space of time and you need a keen eye to look out for any potential problem areas as well as assessing the location. If you have never done this before or don’t know what to look for, you may overlook crucial issues like damp or structural damage. Don’t be naïve and rely on what the agent tells you – his job is to sell the property and reap the commission and he is not going to point out invisible flaws if he doesn’t have to. Don’t be afraid to request another viewing or indeed several viewings of the same property and don’t get carried away by the scenic views across the ocean, put these to the back of your mind and check out the fabric of the house in detail.

Set a Contingency Budget

As well as your initial deposit, which most Greek lenders will expect to be 30% of the sales price, you also needs to set aside cash to cover the costs of other charges associated with the sale like solicitors, translator, surveyors, mortgage lenders fees and the Greek taxes associated with buying a property. It is best to count on an additional 20% of the sales price to cover these incidentals. You might not be buying a run-down renovation project, but if you are buying anything other than a new property you also need to set aside money to cover the costs of any repairs highlighted in the surveyor’s structural report. Whilst you may intend to live with these problems some may not be as minor as you originally thought and may need immediate attention. You will also need money to insure your building and its contents.

Getting a Mortgage

Many Greek banks offer loans to foreigners just as banks in your own country offer loans to buy foreign property. Research what is on offer, in terms of the interest rates charges and don’t forget to look at each lender’s arrangement fee. A mortgage broker or independent adviser dealing in Greek mortgages will be able to help you but some charge for their services. Find out what you can borrow, but it’s not always wise to choose the lender who offers you the most money as their fees or interest rates may be much higher than some of the more conservative lenders. The amount you can borrow will depend on the size of your salary coupled with any outstanding debts and the size of your deposit.  If you simply don’t have enough cash for a deposit or cannot obtain the mortgage you want you could consider co-ownership with a friend or relative.

Some lenders will offer interest only mortgages whereby you pay a lower monthly payment, but don’t actually pay off the mortgage very quickly. A repayment mortgage has higher monthly amounts and will pay off a portion of your mortgage and your interest each month. Once your mortgage has been approved ensure that you obtain an offer in writing to show at your preliminary contract meeting. Be aware that if you or your co-owner defaults on the mortgage payments your home may be repossessed.