how does the right of occupancy purchase of properties works

[raysky]

hi all,

been browsing in etuovi.com
was wondering why are some property listed as right of occupancy vs debt free sales.

what does that mean?

does it mean for purchase with right of occupancy, one has to pay the finance fees monthly plus whatever amount of loan repayment require if the right of occupancy itself is loaned?

e.g:
to purchase a right of occupancy for a property priced at 30k,
one has to fork out 15% of 30k cash only? which means 4500 eur.

and balance 25500 eur can be loaned? assuming 25 yrs with 2,25% interest
so 110eur/mth?

does this means one has to pay 4500eur as downpayment + 110eur/mth + whatever amount of finance charges per month to the housing company?

[Pursuivant]

Don't forget the "right of occupancy" then has the "rent" on top you pay, so you end up paying the loan and a grand or two on top per month.

[Rip]

for detailed explanation it might be useful to offer an example link

[raysky]

let's use this as an example:

http://www.etuovi.com/itempage/c68924?s ... arch&zl=13

so this means 15% cash as downpayment:
4736.8215
and loan 26841.99 from bank with say 25 yrs and 2,25 interest thus monthly repayment of 103eur/mth?

and charge of use as advertised is 1 571.80 € / month.

this means monthly one would need to fork out 1571.80+103 eur?
meaning 1674.8 eur / mth? plus water and car storage as applies?

[betelgeuse]

been browsing in etuovi.com
was wondering why are some property listed as right of occupancy vs debt free sales.

what does that mean?

Debt free sales is not an accurate description for the more common model of buying shares in a limited liability housing company. The two are different models of housing controlled by different legislation.

does it mean for purchase with right of occupancy, one has to pay the finance fees monthly plus whatever amount of loan repayment require if the right of occupancy itself is loaned?

In right of occupancy one has to pay the maintenance and financing of the housing company while having little say in how much those fees are.

http://www.etuovi.com/itempage/c68924?s ... arch&zl=13

so this means 15% cash as downpayment:
4736.8215
and loan 26841.99 from bank with say 25 yrs and 2,25 interest thus monthly repayment of 103eur/mth?

and charge of use as advertised is 1 571.80 € / month.

this means monthly one would need to fork out 1571.80+103 eur?
meaning 1674.8 eur / mth? plus water and car storage as applies?

Yes plus the not listed fees like electricity.

[Rip]

http://www.etuovi.com/itempage/c68924?s ... arch&zl=13

so this means 15% cash as downpayment:
4736.8215

No, no, no. the 31 578.81 € given on the page IS the 15% of their estimated fair price of the apartment (remember these things don't have free secondary market). You need to pay that in full. How you come up with cash is your business. Then top of that the monthly fees listed (+ electricity).

The idea of "right of occupancy" is that you pay a relatively high fee (refundable when you want to move out with inflation protection) when you move in. Then you pay monthly fee that is more than you would pay if you paid maintenance fees in housing company where you actually owned the shares ("apartment"), but less than full rent - without needing to cover costs separately of big renovations (like if you owned shares in housing company) and without having risk of getting kicked out at some point by no fault of yours (which can happen if you live on rental).

[betelgeuse]

http://www.etuovi.com/itempage/c68924?s ... arch&zl=13

so this means 15% cash as downpayment:
4736.8215

No, no, no. the 31 578.81 € given on the page IS the 15% of their estimated fair price of the apartment (remember these things don't have free secondary market). You need to pay that in full. How you come up with cash is your business. Then top of that the monthly fees listed (+ electricity).

Well his calculations while a bitty messy in expression did continue clearly enough to say that they rely on getting the difference between 4736.8215 and 31 578.81 € from the bank.

[Rip]

Well his calculations while a bitty messy in expression did continue clearly enough to say that they rely on getting the difference between 4736.8215 and 31 578.81 € from the bank.

He understands he has to pay it somehow, someday. The rest is indeed messy. He talks both about a "bank" and "finance charges to the housing company".

And the 15% mentioned only means that the company thinks that in this case the 31600€ is 15% of the fair value of the apartment, ("fair value" that has little significance as such, as you neither need or can truly buy it).

[Rip]

Not sure where the 15% mention comes from, might be the OP is calculating the total downpayment he has to do to the Bank if he is to buy that apartment?

See the banner on linked page: http://www.etuovi.com/kohde/c68924?sc=M ... arch&zl=13
also

A right-of-occupancy apartment is an intermediate form between a rental apartment and an owner-occupied apartment. The party acquiring right-of-occupancy must first pay a right-of-occupancy payment, generally amounting to 15% of the purchase price of the apartment.

http://www.kkv.fi/en/facts-and-advice/b ... partments/

31 578.81 € is the ' right-of-occupancy payment'

[betelgeuse]

Not sure where the 15% mention comes from, might be the OP is calculating the total downpayment he has to do to the Bank if he is to buy that apartment?

I expect it to come from the government guarantee to the bank requiring 15% downpayment (though I have no idea if government guarantee applies to right of occupancy).

[Rip]

I expect it to come from the government guarantee to the bank requiring 15% downpayment .

He gave direct link to an apartment listing which has a quite visible 15% banner - 15% that clearly just states the generic "asumisoikeusmaksu" principle.Why do people think he would have meant anything else except that?

[betelgeuse]

I expect it to come from the government guarantee to the bank requiring 15% downpayment .

He gave direct link to an apartment listing which has a quite visible 15% banner - 15% that clearly just states the generic "asumisoikeusmaksu" principle.Why do people think he would have meant anything else except that?

Because of the following in the original post:

one has to fork out 15% of 30k cash only? which means 4500 eur.