How to make financial planning to buy a property

Buying a property is one of the most important financial goals for many Brazilian families. But, before looking for options or simulating financing, it is essential to build a financial plan capable of transforming this objective into a viable long-term project.

Prior organization helps to define how much is possible to invest, what amount can be allocated to the down payment and what financial commitment fits into the budget without compromising other family needs.

"Planning begins with a complete financial diagnosis", says Edmil Adib, director of Real Estate Credit and Institutional Relations with Banks at MRV&CO.

How to start financial planning to buy a property?
The first step is to understand your current financial situation.

Before choosing a property or seeking real estate credit, the buyer needs to know exactly how much he receives and how much he spends per month. This diagnosis should include:

- Salaries and other sources of income;
- Fixed expenses;
- Variable expenses;
- Existing debts;
- Future financial commitments;
- Monthly savings capacity.

According to Edmil Adib, before looking for a property, it is important to understand exactly how much comes into and goes out of the budget every month, identifying income, fixed expenses and expenses that can be temporarily reduced to increase your savings capacity.

Based on this survey, the buyer is able to set realistic goals and avoid the risk of taking on financing that is incompatible with their reality.

How do you know how much money is needed to make a down payment on a property?
The down payment is one of the most important elements of planning.

In general, real estate financing does not usually cover 100% of the value of the property. Therefore, the buyer needs to accumulate their own resources before taking out credit.

"In general, it is recommended to have a down payment equivalent to at least 20% to 30% of the value of the property", says Edmil.

The executive explains that banks normally finance between 70% and 80% of the property's appraised value.

In addition to facilitating credit approval, a larger down payment can generate important benefits:

- Reduction in the amount financed;
- Smaller installments;
- Less commitment to income;
- Reduction in interest paid throughout the contract;
- More financial security.

The higher the down payment, the lower the financing?
In most cases, yes.

When the buyer is able to invest a greater portion of their own resources in the down payment, the amount that needs to be financed decreases.

As a consequence:

- There may be a reduction in the value of installments and/or the financing term
- The total cost of financing tends to be lower;
- The family budget gains more flexibility.

For this reason, experts usually recommend that forming a down payment is one of the first goals of financial planning.

How do I know if I'm prepared to finance a property?
There are some indicators that help assess the ability to take on long-term financing.

One of the main ones is the commitment to income. "As a general rule, financing installments should not exceed 30% of gross monthly family income", says the director of real estate credit.

This percentage is widely used by the market and is also usually considered during credit analysis carried out by financial institutions.

In addition, other signs indicate that the buyer is more prepared to finance:

- Has a reserve;
- Keeps bills up to date;
- Can save regularly;
- Does not depend on credit for basic expenses;
- Has income predictability.

How much money should I save before buying a property?
In addition to the down payment, it is important to build a financial reserve for expenses related to the purchase.

Many buyers focus their efforts only on financing and end up being surprised by other costs that accompany the acquisition. Among them:

- ITBI;
- Registration at a notary's office;
- Documentation fees;
- Moving;
- Furniture;
- Household appliances;
- Small adaptations to the property.

Edmil Adib says that financial preparation must consider all these steps to avoid imbalances in the budget immediately after the purchase.

How can Minha Casa, Minha Vida help with the purchase of property?
Housing programs can significantly reduce the cost of acquisition.

The Minha Casa, Minha Vida program offers differentiated financing conditions for families within specific income ranges, including reduced interest rates and access to housing subsidies.

Currently, it covers families with a monthly income of up to R$13,000, distributed across different service ranges.

Edmil Adib highlights the impact of these mechanisms on financial planning. "Housing subsidies reduce the amount the buyer needs to finance and make purchasing more affordable."

What financial habits help you buy a property faster?
Owning your own home usually depends on discipline and long-term planning.

Some practices can speed up this process:

- Create an exclusive reserve for entry;
- Automate monthly contributions;
- Review expenses periodically;
- Reduce non-essential expenses;
- Avoid short-term debt;
- Compare credit conditions regularly;
- Monitor available housing programs.

What mistakes can get in the way of planning to buy a property?
Some behaviors tend to delay achieving your own home:

- Not controlling the budget;
- Ignoring expenses beyond the down payment;
- Taking on short-term debt;
- Financing beyond payment capacity;
- Not building a financial reserve;
- Failing to research housing programs and credit conditions.

For Edmil Adib, planning should not only aim to make the purchase viable, but to ensure that it is sustainable over the years.

FAQ - frequently asked questions about financial planning to buy a property
How much do I need to have as a down payment to finance a property?
As a reference, experts usually recommend a down payment of between 20% and 30% of the value of the property.

How much income can be committed to financing?
The financial market normally uses the limit of approximately 30% of gross family income as a parameter.

Can I use the FGTS to buy a property?
Yes. The FGTS can be used for down payment, amortization of the outstanding balance or reduction of installments, as long as the legal requirements are met.

Is it worth waiting and adding a larger down payment?
In many cases, yes. The higher the down payment, the lower the amount financed and the total cost of credit tends to be.

Does Minha Casa, Minha Vida help reduce the amount of financing?
Yes. Depending on the income range, the program may offer subsidies and different credit conditions.

What is most important in financial planning to buy a property?
Knowing your own budget, building a financial reserve, setting a down payment goal and evaluating your real ability to pay are the most important steps in the process.

Source: CNN