How to Buy an Apartment Without a Mortgage: Secrets to Obtaining Money from the Bank for Your Own Home!

Acquiring your own home is an important step for everyone. In Estonia, like in many other countries, buying real estate is often done through mortgage financing. However, the question arises: is it possible to get money from the bank without applying for a mortgage to purchase an apartment?

First of all, it is worth noting that most banks prefer to provide targeted mortgage loans secured by the acquired property. This is due to the lower risk for the bank, as in case of non-payment of the loan, the bank has the opportunity to compensate for its losses by selling the pledged property.

Nevertheless, it is theoretically possible to obtain a loan for purchasing housing without applying for a mortgage. The possibility of such financing depends on a multitude of factors:

1. Personal finances: The basic requirement when considering your application for obtaining a non-targeted personal loan is the presence of stable and sufficient income to make monthly loan payments.
2. Credit history: A good credit reputation will increase the chances of loan approval. If a person has a negative history with previous loans, the bank may refuse to issue a new loan or offer less favorable conditions.
3. Loan amount: The amount of a non-targeted personal loan is usually much smaller than the amount that can be obtained through a mortgage. Purchasing real estate through personal loans may be adequate only for the economy class or when buying small living spaces.
4. Interest rates: When using a regular consumer loan, be prepared for significantly higher interest rates compared to mortgage products.
5. Need for collateral: For obtaining large sums, the bank may require the involvement of guarantors or the provision of other collateral.

Alternative financing methods

Leasing for real estate

In Estonia, there is an option for leasing housing, which is an alternative way to acquire property without a traditional mortgage.

Private lending

There is an opportunity to attract funds through private investors or organizations that offer loans with interest without involving banks.

Government programs

Government support may be provided to certain social groups or within special programs aimed at improving housing conditions.

In conclusion, it can be said that although obtaining money from the bank for purchasing an apartment without applying for a mortgage in Estonia is not an easy task, suitable products are still available on the country's financial market. In any case, before making a final decision on the method of purchasing housing, it is advisable to consult with financial experts and consider all possible risks and benefits of the chosen financing strategy.