Buying a rivitalo/kerrostalo

reindeer · Post by **reindeer** » Sun Nov 22, 2015 11:52 pm

Hi,

We're considering to buy our first house/flat in Finland and we're in doubt about whether it'd be a rivitalo or a kerrostalo as there are something we're not sure about.

1. Do you know how long (like 10 years, 20 years etc) there will be a renovation (such as putkiremontti etc) for a rivitalo? (for a kerrostalo, it'll be about 50-60 years for a putkiremontti, right?).
2. Lets say the rivitalo/kerrostalo price is about 300K-350K and we're taking a loan from the bank, how much would it be usually for the downpayment, 10%, 20% etc?
3. Is there any kind of tax we need to pay? We're first time buyer and younger than 40 years old.
4. Do you know if there is any guide about buying a house/flat in Finland?
5. Is it true that the housing loan interest is tax-deductible?

Thanks!

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betelgeuse · Post by **betelgeuse** » Mon Nov 23, 2015 1:13 am

reindeer wrote: 2. Lets say the rivitalo/kerrostalo price is about 300K-350K and we're taking a loan from the bank, how much would it be usually for the downpayment, 10%, 20% etc?

You need to provide collateral for 100%. The shares depending on the credit institution account for 70-80%. If you have collateral for the rest, you could have no downpayment. Generally without existing assets, you need at least 10%. Then you need either insurance or government guarantee to make up the difference.

reindeer wrote: 3. Is there any kind of tax we need to pay? We're first time buyer and younger than 40 years old.

No.

reindeer wrote: 5. Is it true that the housing loan interest is tax-deductible?

Yes but they are gradually phasing it out.

reindeer · Post by **reindeer** » Mon Nov 23, 2015 4:24 pm

Thanks! Any idea about question number 1? About the downpayment, is that something we need to talk with the bank where we take the loan from? Is the house price negotiable and how much can be cut from the asking price?

Piet · Post by **Piet** » Mon Nov 23, 2015 4:46 pm

reindeer wrote:Thanks! Any idea about question number 1? About the downpayment, is that something we need to talk with the bank where we take the loan from? Is the house price negotiable and how much can be cut from the asking price?

It is my experience that most Finnish people that do not really NEED to sell, will not lower the price anything, even if this means the house will be unsold for 10 years

But you can always try, just make an offer and see what the owner(s) answer to that.

Regarding the down-payment for the loan, you probably need to discuss the whole loan with several banks anyway, so ask for their requirements at the same time. Be sure to shop around, some banks are easier but have higher costs..

Good luck with becoming a slave to the banks ... in a few years you will understand why

(said the guy without any debts

)

reindeer · Post by **reindeer** » Mon Nov 23, 2015 5:38 pm

Piet wrote:Good luck with becoming a slave to the banks ... in a few years you will understand why (said the guy without any debts )

Haha, thanks! I like your comment. Sometimes you have no other choices living in this society

reindeer · Post by **reindeer** » Mon Nov 23, 2015 6:53 pm

And btw, do you have any ideas about which banks are the most friendly for house buyers? I have people complain that it's quite difficult with Nordea and they usually have to switch to other smaller banks.

Piet · Post by **Piet** » Tue Nov 24, 2015 12:26 pm

reindeer wrote:And btw, do you have any ideas about which banks are the most friendly for house buyers? I have people complain that it's quite difficult with Nordea and they usually have to switch to other smaller banks.

Sorry, can't help you there

( ---> said the guy without any debts )

reindeer · Post by **reindeer** » Wed Nov 25, 2015 5:59 pm

Anyone who can please?

Pursuivant · Post by **Pursuivant** » Mon Nov 30, 2015 12:31 am

Rivitalo is for posh people, so chances are its better msintained

Upphew · Post by **Upphew** » Tue Dec 01, 2015 10:26 am

Pursuivant wrote:Rivitalo is for posh people, so chances are its better msintained

But smaller ones can be iffy if there are no professionals doing the maintaining.

cressers · Post by **cressers** » Wed Dec 02, 2015 8:38 pm

Nordea have been good to us. I hear Danske Bank is good lately, and OP is hit and miss.

reindeer · Post by **reindeer** » Fri Dec 04, 2015 5:37 pm

cressers wrote:Nordea have been good to us. I hear Danske Bank is good lately, and OP is hit and miss.

I made the loan promise application on Netbank and they promised to get back to me within 3 working days but after 5 days they still didn't contact me until I sent them a message. I've been always a Nordea customer and sadly they just refused to give me a loan. Then I got contacted by Danske bank and they agreed to give me an offer. The loan interest (Euribor 12 month) is 1.017% (is it ok?). Does anyone have experience with Danske bank? Are they good?

reindeer · Post by **reindeer** » Fri Dec 04, 2015 5:51 pm

Pursuivant wrote:Rivitalo is for posh people, so chances are its better msintained

We're not posh

but we prefer a rivitalo/paritalo because we like to have a small garden/yard. I noticed, while searching the house on oikotie.fi, that houses with electrical heating usually have a lot cheaper hoitovastike. For example, it costs 112euro/month for a 80m2 paritalo in Kilo. Is it because a large part (about 50%) of hoitovastike goes to heating? Do you have any ideas about how much the electrical heating costs for such a house (e.g, 80m2)?

betelgeuse · Post by **betelgeuse** » Fri Dec 04, 2015 6:11 pm

reindeer wrote: I made the loan promise application on Netbank and they promised to get back to me within 3 working days but after 5 days they still didn't contact me until I sent them a message. I've been always a Nordea customer and sadly they just refused to give me a loan. Then I got contacted by Danske bank and they agreed to give me an offer. The loan interest (Euribor 12 month) is 1.017% (is it ok?).

Sounds reasonable considering Nordea did not want to give an offer. Marginal is very person dependent and since you provided no information about your income or assets, it's impossible to say much.

reindeer wrote:I noticed, while searching the house on oikotie.fi, that houses with electrical heating usually have a lot cheaper hoitovastike. For example, it costs 112euro/month for a 80m2 paritalo in Kilo. Is it because a large part (about 50%) of hoitovastike goes to heating?

Yes. I don't know the percentage for row houses. In apartment buildings it's closer to 25%. Sounds logical that it would be more for row houses.

reindeer wrote: Do you have any ideas about how much the electrical heating costs for such a house (e.g, 80m2)?

The agent should be able to provide you the costs of the seller.

JukkaM · Post by **JukkaM** » Wed Dec 09, 2015 2:26 am

Speaking on general level.

Things that should be considered carefully:

-Does the housing company own the land or is it rented from municipality? If rented, what are the exact rental terms like length of contract.

-What is included in monthly fee (yhtiövastike) and what is paid separately. It is not so uncommon, that in rowhouse everybody pays electrical heating separately. Also some smaller housing companies rely heavily on own work of owners for maintenance. Can be really cost efficient and might offer great social contacts and even make friends for life, or be a nightmare with neverending quarrels and expensive repairs after multiple rounds of trial and error.

-It seems (based on statistically unsignificant sample of own experiences and stories) that on smaller buildings like rowhouses there is more variation on building quality and especially building methods and used technology. As an example, practically all apartments in greater Helsinki area are connected to district heat system with higher initial cost and energy cost around 60-80€/MWh, whereas some rowhouses have direct electrical heating with low initial cost and energy price of 120€/MWh. Electricity bills of previous owner give some information of costs in case of electrical heating, but there might be some variation due to different living habits.

In case of bigger (100k€+) loans it probably pays to spend a little extra effort to get (or at least try to get) an offer from as many banks as possible. After having "all the papers" in one file, it just needs one call to book an appointment and roughly one hour to visit and answer questions and fill the forms. Some banks even offer You coffee.

Different banks have different rules for downpayments and extra collaterals. There is minimum level to get the loan, and if You can present some extra, You can bargain on the interest margin. Sometimes I hear people saying, that reasonable terms are offfered for people not in need of loan at all...
If I (as a layman, not financial consultant, use Your OWN judgement) should guess something about the margins, I'd say that if it is 1,xx%, You are either close to max amount of loan You can get ( based on incomes and property/collateral) or they are ahead of their expected sales. In other cases margin should be under 1%. Euribor assumed.

Personal experiences gathered in last 3 years:

-Nordea: Sticky organisation "...but we have this rule...", #@¤¤§# service, incompetent personnel at desk and 1 month+ queue for that only specialist hiding somewhere. Reasonable interest margins. Probably cheapest, if You do not buy/sell apartments or re-structure loans frequently. Choice for person who can bend to banks schedules and outdated routines. Quill and pigeons needed to communicate. Aggressive marketing for poor and expensive securities products, be careful not to bite the hook.

-OP: If You can/will transfer _everything_ from car insurance to securities to them, pricing might be very competitive. Service varies from good to nonexistent, being sloppy on average. Possibly considerable option, if You are willing to take the risk and concentrate all financial services to company, that might answer your call already next week or maybe not.

-Säästöpankki: Efficient, good service. Highest need for extra collateral IIRC, expensive. Expects You to concentrate Your banking, at least Your checking account+probably cards.

-Aktia: Competitive loan offer, quick response and good service. Having some of their expensive-on-entire-new-level financial insurance products (sijoitusvakuutus) would have been mandatory to get loan, which made offer as a whole pretty unreasonable.

-Handelsbanken: (disclaimer, AFAIK they have exceptionally great level of autonomy for single offices, so experience on one (Herttoniemi) is not necessary valid on another) Reasonable margin if they get your checking account, cards, securities trading and grandmas jewellery. Very fast and polite service.

-Danske: In my case* _I_N_S_A_N_E_ fixed rules. For customer matching their standard form, could be reasonable, at least margin was competitive.

-HYPO: Service was in range I thought was reserved for those who ask 100M€ loans. Margin almost matching Nordea, but very flexible about structuring loans. Choice for customer with abundant collateral and willing to pay a bit for flexibility and service. Does not offer checking accounts, so You need some other bank for daily operations.

*We were asking offers for abt 120k€ loan to buy one more apartment (120k€) to rent out. There was free title for another apartment for same price range available for extra collateral, but still they were asking 10% downpayment. I asked, that what if I sell this apartment we already own for my brother, and then ask for two 60k€ loans to buy it back+that another apartment. That would have been fine. That fine young man checking my excels and offering fresh coffee actually said they could probably give three 80k€ loans to buy two new apartments+the old back, but 10% down in cash was non-negotiable, and he admitted it didn't make any sense, but it was THE RULE he (nor his super) could make exceptions. Chocolates were also of high quality...

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