What should you know before buying a house?

Buying a house is certainly a big undertaking. It requires a lot of preparation, including finances, paperwork, researching the house you want to buy, and gathering information on different banks offering house loans. Importantly, there are many types of housing projects, both those with and without land allocation. Therefore, before buying a house, there are many things to research to avoid making a wrong decision. Today, we've compiled essential information you should know about (before) buying a house. It's guaranteed to be helpful for housebuyers.

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Buying a house with a land allocation permit is much better.

Many people may not know that housing projects on sale include both those that have obtained permits according to the law (Land Allocation Act) and those that have not. Buying a house in a legally allocated project is definitely better because buyers receive legal protection and have the opportunity to receive government support, such as tax reductions and preferential interest rates. You can tell if a project has a land allocation permit by looking for the document (permit number/receipt number) displayed or mentioned in the brochure. So, when visiting sales offices, look for the project's documentation. "Is it a 'land allocation permit'?" If you don't see one, you can ask the sales staff.

**Note:** Projects that haven't received a land allocation permit may be due to two reasons: 1. They aren't required to have a permit because they are small-scale projects. 2. They are avoiding obtaining a land allocation permit, which is rare because getting caught carries criminal penalties.

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If your loan isn't approved, your down payment may be forfeited.

Most housing developments use a down payment system, where buyers make partial down payments during construction. Once the house is built, buyers then take out a bank loan to pay the remaining balance. However, a common problem is that the down payment can be lost if the loan isn't approved. This is because most projects don't have a policy of refunding down payments if the loan is unsuccessful. Therefore, before reserving a house or making a down payment, be sure you can secure a loan or get approved. If possible, try to find a project that offers a refund for the down payment if the loan is unsuccessful. While this may be difficult to find, it's worth a try.

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Long-term loans with low monthly payments may not be suitable for everyone.

house loans typically have long repayment periods, averaging 20-30 years. Choosing a longer loan term for lower monthly payments might be suitable for those who aren't prepared for a heavy mortgage burden, especially if they already have many other debts. Conversely, this approach might not be ideal for those with strong repayment capabilities, as long-term loans accumulate interest, eventually exceeding the initial mortgage payment. Therefore, those without repayment problems can opt for a longer loan term, but consistently making higher monthly payments than the bank's minimum can significantly reduce the principal, save on interest, and speed up the loan repayment process.

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Living in a housing development project also requires paying common area fees.

Land development laws stipulate that houseowners in housing developments are responsible for maintaining the community, including common area electricity, security, amenities/gardening, etc. Penalties apply to houseowners who fail to pay or are in arrears on common area fees, and exceeding three months of arrears may result in suspension of services or utilities. However, if payments are overdue for more than 6 months, the title deed may be seized, preventing any legal transactions. This penalty is severe because you will lose the opportunity to sell or transfer ownership of the house until all outstanding debts are paid off and you receive a debt-free certificate from the juristic person (management company). Therefore, before buying a house, you must be aware of this – it's about shared responsibility towards the community.

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It's clear that (before) buying a house, you should know several things. There's a lot of information available, but the main points are as we've shared here. These are important things you shouldn't miss because buying a house is a big decision, involving a significant investment and a long-term residence. To avoid future problems, following the rules is crucial.

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Thanks for the valuable information from house.