Buying a property is at the heart of Brazilians’ life projects, but a cash purchase is not always possible, as it may take many years to save the necessary money. Thus, it is necessary to seek credit in the market to accomplish this objective, and among the most common options are consortium, loan and financing.
Knowing the differences between these modalities is critical to ensuring the best use of the budget and helping the consumer make the healthier decision for their pocket. Know more!
The consortium is a shared purchase, a kind of collective savings that gathers in groups people with similar goals. Each month, each group member pays a certain amount that will compose the common fund and monthly one or more members are contemplated, that is, they are entitled to credit and can carry out their projects.
The contemplation is carried out by lottery, through the Federal Lottery, or by bidding, which is nothing more than the advance payment of the installments.
Since the consortium members do not lend money from an institution but self-finance, there is no interest charge. The customer also does not need to have a portion of the value of the property, as no entry is charged. The installment only covers the administration fee for the company responsible for the organization and management of consortium groups. The value of this rate is very low compared to the interest of other modalities. At Ademilar, it is around 0.1% per month, one of the lowest in the market.
In addition to the economy, flexibility is another important advantage of the consortium, as various plans are offered, with varying amounts of credits and installments, which adapt to the budget and needs of each consortium member. In addition, the customer has the freedom to choose the property they want and also the builder or real estate that will intermediate the acquisition. In addition, if the consortium member chooses a property with a lower value than the credit, the surplus can be used to pay documentation expenses or reduce the outstanding balance.
As the credit is adjusted annually according to the National Construction Cost Index ( INCC ), the installments are automatically adjusted as well. This is so that the purchasing power of the consortium member and other group members is maintained. When the customer is contemplated, the credit is passed on directly to the seller of the property, which is equivalent to having money in hand, thus ensuring the purchasing power of the consortium, which can negotiate good discounts.
Financing a property means borrowing money from a bank to be able to buy the property and repay the debt within 35 years through interest-bearing installments of up to 9% per annum. To provide financing, institutions also charge the TAC (Credit Opening Rate) and IOF ( Tax on Credit, Exchange and Insurance). Because of these issues is that at the end of the payment period the customer can pay up to twice the value of the property.
In addition, only part of the property can be financed, ie the consumer needs to pay a down payment of at least 10%, but it can reach 30% of the value of the property.
Financing is done through a bank and each institution establishes specific rules on the terms of payment, the amount of interest, the duration of the contracts and how much of the property can be financed. There is often a lot of paperwork in this process, involving income analysis and buyer history.
There are also different lines of credit, which differ according to the maximum amount to be financed. Another feature is the debt amortization system. In the Price table, the value of the installment remains the same throughout the payment term, while in the SAC table the customer starts paying a higher installment amount, which decreases over the years.
A loan is a contract between the consumer and a bank, cooperative or other financial institution where a value is received and must be repaid within a specified period. Unlike financing, the amount borrowed need not have a specific purpose, the customer can use it in whatever way they see fit. Precisely because there is no real guarantee that the payment will be made (such as a disposed property that can be recovered in the event of default), the interest on the loan is usually higher.
The exception is payroll loans, which offer more security to the bank, as installments are debited directly from the payroll or INSS benefit. However, this modality is only available to INSS retirees and pensioners, civil servants and employees of companies associated with the bank. Because a portion of income is compromised even before it falls into the consumer’s account, this type of loan can make financial planning difficult and even lead to over-indebtedness.
By way of comparison, while in the traditional personal loan interest rates exceed 20% per month, in payroll the interest rate is a maximum of 6.27% per month. In both cases, there is also the IOF charge.
The main differences between consortium, loan and financing
After all, which of these is the best option to buy a property?
The best option is one that does not compromise the budget or affect the quality of life. In this sense, the consortium proves to be a smart choice, after all, allows the consumer to schedule the purchase of the property, favoring long-term financial planning. Even if he pays rent and wants to buy his own property, there is the possibility of opting for the reduced portion, which pays 70% of the common fund of the installment until contemplation.
Since there is no interest and no down payment, the budget is not compromised, and a possible financial reserve can be used to try to anticipate contemplation by bidding.
Ademilar offers a wide variety of plans for those who want to buy a property. Visit the site, make a simulation and share this project with us!