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Financing your Nesto flat is easier than you think

20. October 2022

Nesto is a greenfield development project and this increases the investment potential in this new premium housing development in an emerging and carefully designed neighbourhood in Bratislava’s Petržalka district. Thanks to our experience and strategic planning, the flats in the Nesto project are being sold without an inflation clause. “Our partner banks offer our clients unique conditions to obtain the most advantageous loans,” said Ing. Martina Slamková, Lucron’s Head of Customer Financing, in an interview.

What are the benefits of investing in a high-quality new-built property at Nesto?

Clients see that our vision of living in Nesto makes sense. This brand new and fully serviced residential district in Petržalka is set to become a “20-minute” neighbourhood, with everything residents need at hand. Nesto will not only be a good place to live, but its residents will also have access to all the amenities and services they need. The neighbourhood will include offices, a school, a kindergarten, sports facilities, a medical centre, public amenities and services, as well as co-living spaces – residential community living, which is becoming ever more popular. The historical legacy of the site has been preserved and there will be excellent transport connections to Bratislava city centre and Austria. A new public bus stop has already been built at Nesto. In line with our green strategy, Nesto has been designed with pedestrians and cyclists in mind. Last but not least, we are an established real estate developer with a successful history of many completed residential projects.

Ing. Martina Slamková, Head of Customer Financing at Lucron

Buying a flat prior to construction or while under construction is also known as buying presale. What are the benefits for clients and what are the specifics of buying a flat before it is completed?

The major benefit is that clients have a chance to choose their ideal flat (floor, layout) for the best price available. We offer our clients mortgage financing for our projects via our partner banks (ČSOB, VÚB, Tatra banka and Slovenská sporiteľňa), who will provide future owners financing under more advantageous conditions and with a minimum of paperwork.

What should clients know about the project before they decide to buy a flat and sign a reservation agreement and/or preliminary contract?

First of all, clients choose their ideal property. To make it easier for them, our website shows layouts for every flat and their furnishings. Then, they should consider how they want to finance the purchase (how much of their own funds they want to use and how much they need to borrow).

How can I buy a flat in Nesto?

Our sales agents listen to what our clients tells us they want and then we present them with options that meet their expectations of living in Nesto. After they choose the property, we will make a reservation and draw up a reservation agreement. The client can immediately begin checking the options of mortgage financing with the banks. A preliminary contract is then signed detailing the terms and conditions of the future sale and purchase transaction. After a residential building has successfully passed the final inspection, the client completes the purchase price payment and we hand over the flat. The last step involves the signing of a sale and purchase agreement and transferring the ownership title to the property to the client.

How can the clients buying a flat in our project finance the portion of the purchase price not covered by a mortgage loan?

Clients wanting to buy a flat in Nesto may be eligible to receive a mortgage loan for up to 90% of the purchase price at a bank. Banks assess loan applications on a case-by-case basis by reviewing the client’s creditworthiness, i.e. what loan amount the applicant will be able to repay. If the client can mortgage another property and meets the income criteria, they may be able to obtain 100% funding of the purchase price. Other types of consumer loan can also be used, as well as financing via a building savings bank.

Which customer’s parameters and factors are reviewed by banks when approving a mortgage loan? What should I avoid before applying for a mortgage with a bank?

The key criteria that banks consider include the applicant’s / co-applicant’s income (the sector they work in, length and type of employment status), their expenditure (by checking their credit rating data), marital status (single or married), and the number of household members – these criteria are used by the bank to set the maximum size of the loan. They will also want to know your age (to determine the maximum loan repayment period) and education level, as well as the value of the property to be mortgaged. Applicants should definitely avoid late repayments on existing loans: you should be sure to make all your payments on time and in full.

What are the mortgage specifics when buying a flat in Nesto? What type of assistance can clients count on?

Our partner banks offer a simplified application procedure to our clients: they do not have to submit an expert’s appraisal – all they need is their ID card, proof of income and a contract, i.e. a reservation agreement and/or preliminary contract. The client receives a discount on the loan origination fee and will obtain the best available interest rate. A great benefit is that our clients can consult and arrange the loan at our partner banks’ branch offices, which have all the information about our project, and their mortgage specialists give priority to our clients.

Ing. Martina Slamková, Head of Customer Financing at Lucron

How long does the entire process take, i.e. visiting the point of sale, signing a preliminary contract and obtaining mortgage loan approval?

The client chooses their property and signs a reservation agreement with us. A reservation fee of EUR 3,000 must be paid within three business days. Then they have 30 days to sign a preliminary contract with us. In the meantime, the client will be able to arrange a mortgage loan in approx. two weeks.

What would you recommend to our future clients regarding funding?

Mortgage loans to finance property transactions are still available. We recommend our clients apply for a mortgage loan as soon as possible after they have signed the reservation agreement, due to rising interest rates. The conditions in Slovakia are still better than, for instance, in the Czech Republic, where interest rates have already reached 6%. In addition, the National Bank of Slovakia recently announced it will limit the maximum size of loans for applicants over 40 years of age as of next year. This means that buyers will have to use more of their own funds to buy a property. Clients who will be affected by this restriction have a unique opportunity to buy a flat in Nesto right now. Not to mention that prices will be considerably higher after the neighbourhood is completed than they are today.

Some real estate developers have introduced an inflation clause. What is this and why is it bad for clients?

The inflation clause means that a real estate developer may unilaterally increase the price of the flat you are buying even after you have signed a preliminary contract. It can do so due to inflation or an increase in input costs. This puts clients in an uncomfortable situation, as the mortgage loan previously approved by the bank may no longer be enough to buy the property. Clients who do not have enough of their own savings, or clients for whom a bank has refused to increase the approved size of the mortgage loan, may be forced to withdraw from their contract and seek a new property. This is one of the reasons why you should always buy from a renowned and experienced developer that does not transfer its business risks to its clients, so clients can rest assured that once they sign their contract the price is fixed.

Our contracts with clients do not contain an inflation clause. What are the benefits for clients?

There is no inflation clause in the contracts for flats at Nesto. This is possible due to our strategic construction planning and Lucron’s many years of experience. It means that clients will acquire their flats for a set price that will not be increased by inflation during the construction. We are committed to our customer-oriented and professional approach; therefore, we will seek to continue this benefit in the future.

If you have any questions about financing the purchase of a Nesto property, contact us at: hypoteky@nesto.sk

Or visit: www.nesto.sk/financovanie to learn more.

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