Financing series: direct with the construction company
Buying a financed apartment is the reality of many Brazilian families, but did you know that it is possible to finance directly with the construction company?
There are many advantages in carrying out the contract directly with the construction company, such as ensuring it is easier to negotiate terms and even values. In addition, it is also possible to buy the property by paying in installments directly to the construction company.
It is also important to remember that, like any credit operation, financing is subject to the approval conditions and also to the financial rules of each institution.
Find out below how to direct financing with the construction company works and guarantees your property.
Advantages of financing with the construction company
Financing the property directly with the construction company is a very good possibility when buying the property in the plant, as most banks only approve the financing after the work is finished.
In addition, direct financing with the construction company is an option that interests most developers, as it is a way to facilitate the sale of the property.
So, when buying a new apartment, on-plan or under construction, if the financing is not provided by the Minha Casa Minha Vida program, you can do it directly with the construction company, during the construction period.
Financing with the construction company has many advantages. You can pay a leaner down payment, usually 5% of the property’s value, and the rest can be diluted over the entire construction time. After the construction period, the financing is transferred to a bank, which may be your preference, without the obligation to sign a contract with a specific bank.
However, during the works, the installments will be subject to monthly correction by the National Construction Cost Index (INCC), which normally has a correction rate lower than the inflation rate and is charged at the time of signing the contract.
The PRICE System is used for debt amortization in the financing made directly with the construction company, that is, all installments have the same value, and the General Market Price Index (IGP-M) and the interest rate are considered in the correction.
An important point to pay attention to is time. Buying an apartment on the floor plan is something that takes time to materialize, after all, it is a cheaper way of buying but recommended only for those who are not in a hurry to move, as the works usually take three years.
Another positive point is that if you give up on buying the apartment, whether, for financial or personal reasons, the construction company will return part of the installments already paid. See our article on dissolution law, which shows something very different from what happens in bank financing cases.
Financing with the construction company: special conditions
Based on this need for Brazilians to finance an apartment, some builders decided to guarantee special conditions to make life easier for the buyer.
One of them is Eztec, which, unlike the standard, offers the option of financing directly with the construction company even after the completion of the works, through a less demanding credit analysis than that of banks.
Eztec offers direct financing with the construction company in at least 180 months for all projects not benefited by Minha Casa Minha Vida.
This is already an old practice of the construction company, which, in 2015, expanded the maximum term of financing to 240 months, making life much easier for the buyer who is unable to fit a large portion of the budget and, now, can dilute it in more time.
“The idea that the buyer has is that the bank will finance the apartment without any bureaucracy, but when we really see what happens today, the customer notices the difficulty of a credit approval with the banks, for some simple reasons, at sometimes, like an unpaid consumer bill, an old record of default that remains as history, causing a difficulty and even higher interest because of it!”
In 2018 and 2019, 65% of all property sales made by Eztec were made via direct financing.
Another construction company that also offers this facility to its customers is Helbor, which has been operating in the market for 42 years and has always offered the option of direct financing with the construction company.
As a company that has been in the market for a long time, it has lived through several phases of the real estate sector and knows that banks are not always interested in granting loans for financing, hence the importance of the construction company fulfilling this role, making it the dream of homeownership possible even for those who do not have good credit conditions in banks.
“Usually this type of financing is used by customers who prefer not to opt for bank financing because they expect to quickly pay off their new property, with funds from another real estate transaction, compensation or inheritance. This model also serves customers who do not want to take out long-term financing or who, due to age or banking history, do not have the same credit conditions offered to most. As for documentation, indirect financing, this operation is facilitated by the reduced need for documents to be requested from the client.”
Currently, around 17% of sales made by Helbor are made through financing directly with the developer.
There are several conditions on the market. Take the time to get to know them by contacting the construction companies.
Financing directly with the construction company: how does it work?
Now that you know the options when it comes to financing done directly with the construction company, understand how it works.
First, to get a loan directly from the construction company, you need to find a new property, ready or on-plan, as the developers accept this type of loan, that is, the financing that will be carried out, only for new options.
Next, the proposal is analyzed and then a credit analysis is performed. Afterward, the property is appraised, as well as the long-term financial conditions of the client who wishes to acquire it.
After this process, it is necessary to deliver some documents, most of the proof, such as proof of income, proof of marital status, payslips, income tax declaration, bank statements, among others.
When financing directly with the builder, it is not necessary to worry about the property documentation for approval, as the builder itself is considered the owner of the property, that is, it is easier for you during the process.
In the end, if there are no restrictions, a legal analysis is carried out and, finally, the funding is released.
Now that you know how financing works with the construction company, look for the options that best fit your plans, talk to the companies, pay attention to the details of the negotiation, evaluate the processes and enjoy your property!
Have you ever used any type of financing directly with the construction company? Tell us in the comments!