How to buy a home? Nine steps to your own House
Buying a home is a significant decision. That’s why before signing the purchase papers, it’s worth considering the choice from several different perspectives. We’ve listed below a few things you should think about when buying a home. Read on for the best tips related to location, floor plans, zoning, features, and the future housing market.
1. Define your housing budget
Interested in buying your own home? Great! The first step toward a successful purchase is to define your budget and figure out how much you can spend on housing costs each month. In other words, what should you consider from the perspective of your personal finances? Experts usually recommend setting aside about one-third of your monthly budget for loan repayments and maintenance fees. Once you’ve determined this amount, you can use bank loan calculators to estimate how large a mortgage you could potentially get.2. Protect yourself against rising interest rates
Worried about interest rates going up? There are many ways to protect your finances from the effects of rising mortgage rates. Banks offer various interest rate protection services (for a fee), which allow you to set a maximum rate for your loan—or part of it. First-home savers using the ASP scheme receive an interest subsidy from the state under certain conditions. Another way to keep monthly costs steady is to choose an equal-payment mortgage. With this option, the monthly payment remains exactly the same regardless of rate fluctuations; only the loan term becomes longer or shorter as interest rates change.3. Consider location and transport connections
Location is famously one of the most important factors in buying a home. What should you keep in mind when choosing? Once you’ve found an interesting property, make sure it has reasonable connections to your workplace, schools, daycare, and daily services. Also think about possible future changes—such as a new job or children moving on to further studies. Olas developments are built in peaceful, nature-friendly locations with convenient transport connections across the Helsinki metropolitan area. In many of our sites, connections are constantly improving as major tram projects in the region are completed.4. Check local services
Nearby services are extremely important for comfort of living. What should you consider? Look into the availability of services in the area: Are there shops, public services, playgrounds, or sports facilities nearby? Can you reach the store on foot or by bike, or do you need a car? Are there outdoor trails or other recreational opportunities? Where are the nearest large shopping centers, and how easy are they to reach? Thanks to the natural surroundings of Olas developments, outdoor opportunities are always excellent. Shops, playgrounds, and many public services are within walking distance, and larger shopping centers are usually just a few minutes’ drive away. Detailed service listings are available in the sales materials for each development.5. Ensure the builder’s financial stability
In the first half of 2023, around 300 construction companies in Finland went bankrupt, more than a hundred of them residential builders. Unsold apartments have caused a growing hole in many companies’ cash flows. With costs continuing, difficulties with payments, restructurings, and bankruptcies may follow. For buyers, it’s wise to examine the builder’s finances before making a purchase—otherwise, already paid sums might be at risk if the builder faces insolvency. We present a few financial figures that are worth reviewing during the purchase phase. The information can be found in the construction company’s financial statements, but if several months have passed since the end of the financial year, it is advisable to ask the seller for more up-to-date information.-
- Cash and bank receivables: This must be sufficiently large so that the company has the ability to cope with unexpected situations that may arise. Especially in the current market situation, where the housing market is weaker, companies with a weak cash position may have difficulties meeting their bills and obligations. It is advisable for cash reserves to amount to several percent of the company’s annual revenue.
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- Before starting each new construction project, Olas ensures that it has sufficient cash flow to carry the project through to completion. One example of this is the joint sales events for the first homebuyers, which ensure a sufficient number of buyers before the construction of the project begins
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- The financial result of the fiscal year indicates the profitability of operations. It is in the buyer’s interest that the company generates profit. This way, the customer can be more confident that the company is able to complete the project and bear its responsibilities after construction. In the last fiscal year, Olas achieved a commendable operating profit of about 10%, and it forecasts the same operating profit percentage for 2023.
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- The amount of revenue and its development compared to previous fiscal years partly indicates how steadily the company is managed. Excessive risk-taking and growth can backfire during weaker times if apartments remain unsold and cash runs dry. The ability to maintain profitability in the future is also a good measure of whether the growth has been on a sustainable basis. Olas has increased its revenue profitably every year and forecasts the same pace to continue this year as well.
