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Buying another apartment

without selling the first one (yet)

delta76
post 5.Mar.2018, 10:55 AM
Post #1
Joined: 4.Oct.2014

Hi,
We are looking to buy another bigger apartment to move in - as we are getting new family member, and the market is plumbing so we hope it's a good time to throw our money in.

But that comes with a catch that we don't want to sell our current apartment just yet, because we would have to sell at a lost now. We also have a friend (or rather, friends) which desperately need an accommodation), so we would hope to rent out to them, at least for 1 year.

We are still have mortgage for our current apartment. Our incomes are enough to cover another mortgage, but is it possible to secure another loan? Or the banks would just refuse that?

Thanks
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wondering_again
post 5.Mar.2018, 02:48 PM
Post #2
Joined: 12.Feb.2014

1. You need to talk to your bank first. I hope you have a good person at the bank and who you can explain your plan. The problem is that the bank need to agree to the bridging loan and it will be expensive with higher interest rates. So you need to think carefully.

2. Your current board in the old apartment may not want that you rent the apartment for year on year without selling it. So you will need their approval for renting out this apartment for more than a year

I wish you all the best with your new family member and apartment !
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Essingen55
post 5.Mar.2018, 02:55 PM
Post #3
Joined: 12.Dec.2013

The board should allow you to rent it for a maximum of one year because it is difficult to sell, since this one of the reasons that is allowed. However, in this case it may not be hard to sell, it is just that it is hard to get the price that you want. However, that is not the main problem. I think it highly unlikely that a bank would accept this unless you have loads of money for a very sizeable deposit. Don't forget that new repayment rules also apply from 1 March. Not convinced you've thought this through.
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delta76
post 5.Mar.2018, 03:02 PM
Post #4
Joined: 4.Oct.2014

Thanks for the replies!

Yes, we know about the new rules in March. Our combined incomes can still cover that - if I understand correctly - as the rules say the conditions will be more strict if you want to borrow more than 4.5 times your annual income. Or am I missing something?

I just want to rent out for 1 year so the market will hopefully recover a bit, and our friends can find more long term solutions (first hand/buy one themselves).

What would be the main reason(s) for the bank to refuse the loan? Is it some rules to avoid speculating? Or is it basically economical?
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Essingen55
post 5.Mar.2018, 04:12 PM
Post #5
Joined: 12.Dec.2013

The bank may well think that the market won't recover in the next year or so.
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yet another brit
post 5.Mar.2018, 11:14 PM
Post #6
Joined: 5.Jan.2013

QUOTE (delta76 @ 5.Mar.2018, 03:02 PM) *
What would be the main reason(s) for the bank to refuse the loan? Is it some rules to avoid speculating? Or is it basically economical?


One reason is that there has never been, and still isn't, any kind of buy-to-let thing here.

One of the reasons BTL never happened was it was close to impossible to legally sublet. Now it is just "not quite impossible", but rare still to find a förening that will let you buy an apartment to rent out as an investment.

BTL is however, and always has been, perfectly legal on a house where you own the freehold. But there is no culture of renting shared houses. Is that good or not? Having seen what it did to the UK, on balance that may have turned out to be a good thing. The market has been overheated enough already...

Banks are allowed to lend money. You just have to persuade them...
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john.boy
post 6.Mar.2018, 06:49 AM
Post #7
Location: Stockholm county
Joined: 27.Sep.2017

If you do not get permission from the BRF to rent out the apartment and you have a second apartment, under older rules, you risk losing one of the apartments. It is possible for the BRF to take back the shares, leaving you out of pocket, because you have an apartment that you are not using. This is one of the other reasons why buy-to-let is no common in Sweden.
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delta76
post 6.Mar.2018, 09:38 AM
Post #8
Joined: 4.Oct.2014

Thanks for the information.
So just let say we will tell the BRF that we want to sell the apartment eventually but it's hard to sell now so we want to wait for a bit.
Does that sound like a reasonable idea?
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Essingen55
post 6.Mar.2018, 10:42 AM
Post #9
Joined: 12.Dec.2013

Not only is it a reasonable idea, but it is the only valid reason you have for sub-letting. But what happens when the situation is worse in one year's time?
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delta76
post 6.Mar.2018, 11:29 AM
Post #10
Joined: 4.Oct.2014

Well - noone can say for sure, we are of course betting on the recover of the market. If it recovers, good, if it does not, then, ...
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KKK
post 13.Mar.2018, 02:03 AM
Post #11
Location: Gothenburg
Joined: 11.Mar.2018

Hello;
we also plan to buy a house/apartment.

But just confused.



-If we buy an apartment, we just buy 'right to live'--correct?
-If we buy a house , we buy ownership -- correct?

but I also heard that in some houses , we also cannot buy ownership, and just get right to live


Can you pls inform what is the exact rule for ownership incase of buying ?

thanks
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DuneSunny
post 13.Mar.2018, 10:34 AM
Post #12
Joined: 11.Mar.2014

If you buy an apartment you are basically buying shares in the BRF / Tenant's Association with the right to live in a specific flat. You are responsible for your own mortgage as well as the BRF loan.

If you buy a house it will depend on the form of ownership as registered in the title deeds - it could be freehold leasehold or a BRF. Many Terraced Houses (Radhus) are in BRF format.

You also need to check if you are part of any common areas / services - (gemensamhetsanläggning and samfällighet) as you might be partly resonsible for common costs relating to a wider area . e.g. common water and drainage pipes on a housing estate, private access roads, footpaths etc.
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yet another brit
post 13.Mar.2018, 06:17 PM
Post #13
Joined: 5.Jan.2013

If you buy a detached house, then it is usually freehold - it will specifically say so ("friköpt").

Some plots/houses are leased, and there is a ground rent associated with the property - this should be noted on the particulars. This can be a gotcha, as there is not necessarily any guarantee that the landowner (quite likely the kommun) won't arbitrarily increase it.

Terraced houses - radhus - can be rental, bostadsrätt, or sometimes friköpt. It all depends. They may also be within a non-public area, which means that you may have a "samfäldighets" cost to clear snow etc, even if you own the freehold.

All this is obvious in the particulars - as long as you know what to look for. But as a rule of thumb, then if it is for sale then a villa will be freehold, a flat will be bostadsrätt, and a terraced house or semi-detached might be either.
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KKK
post 13.Mar.2018, 06:18 PM
Post #14
Location: Gothenburg
Joined: 11.Mar.2018

Can I please learn meaning of BRF ?
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DuneSunny
post 14.Mar.2018, 12:58 PM
Post #15
Joined: 11.Mar.2014

QUOTE (KKK @ 13.Mar.2018, 06:18 PM) *
Can I please learn meaning of BRF ?


A BRF is a bostadsrättsförening = A Tenants' Association.

Similar to a condominium
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