Advice for a safe and comfortable home
Buying a home
Buying a home is really exciting, but it is also a really important decision. When you are house hunting, you should thoroughly consider your own life situation to find the right home for you.
You need to know, among other things, how much you can afford to buy for, whether you need to sell your home before you buy, where you want to live and what is important to you in a home and its surrounding area.
We give you tips and advice – from when you dream of moving, to when you have the keys to your new home.
Three things you need to know before buying your first home
Explore opportunities for buying a home
Buying a home together?
What is required to get a loan?
All banks in Norway must follow lending regulations. These regulations specify what should be in place for the bank to be able to grant you a mortgage. The main rule is that you cannot borrow more than five times your own income and that your equity is 15% of the total purchase price. But remember: every rule has its exceptions.
Security in parents' property
One in three first-time buyers depends on help from parents when they need to buy their first home.
There are several ways parents can help their children enter the property market, whether in the form of cash gifts, inheritance or Security in parents' property.
Cabin, Holiday Property and Second Home
Buying a cabin is not very different from buying a home, but there may be some things you should consider more carefully.
- Before you start looking for cabins, it is important to set a realistic budget. Take into account both the purchase price and other expenses such as property tax, insurance, maintenance and any upgrades.
- Choose location carefully: Think carefully about where you want to buy a cabin. Consider factors such as accessibility, distance to services, nature and activities in the area.
- Look at several options: Do not jump at the first offer you see. Take time to visit several cabins so that you can compare what you find with something.
- Check which rules and restrictions apply to the property. Can you build a jetty or boat mooring?
- Think long-term and consider how you plan to use the cabin. Is it a holiday cabin, or do you envisage living there more permanently?
- Plan for future maintenance and upgrades.
- Be realistic: A cabin can be a great investment and retreat, but it can also require time and resources to maintain. Take the time to consider whether it is right for you and your lifestyle.
Type of mortgage
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Construction loan
For large projects, a construction loan will often be part of the financial solution. A construction loan covers ongoing charges during the construction period, and the disbursements follow the progress of the property. When the property has a certificate of completion, the construction loan is converted into a mortgage.
Home equity credit line (HELOC)
A home equity credit line (HELOC) is a more flexible mortgage that allows you to borrow up to 60% of your property's value. This amount is your borrowing limit and can be used as you wish. A home equity credit line (HELOC) gives you great flexibility and you can make withdrawals yourself free of charge in online or mobile banking. This is why a home equity credit line (HELOC) is also called a flexible loan, flexi-loan or home equity credit.
How to attend a property viewing?
When you attend a property viewing, you must consider what is important to you in a home: What is it that makes you want to view the property you have chosen? Take your time, don't rush during the viewing, and ensure that enough of your requirements are met before you enter into a bidding process.
During a property viewing, it is important to identify any faults and deficiencies, and to form an impression of what renovation and repairs you may need to undertake.
It is even more important to identify things you cannot change: If you buy a flat or a house only to discover afterwards that the sun leaves the balcony long before you return home from work, or that there are no schools, nurseries or public transport in the area, it is difficult to do anything about it.
Common forms of ownership
Selling property
Property valuation
You can get a property valuation if you need to sell your property or cabin, if you are considering refinancing your loan, or need to know what assets you have, for example in the event of an inheritance settlement or divorce.
It is the estate agent who provides you with the valuation, and it indicates what the property could be sold for in today's market.
Here is how to proceed:
- Order a property valuation from DNB Eiendom
- An inspection of the property is carried out with the broker. The broker must document the property's condition by taking some photographs. You should be able to provide the year of construction, upgrades that have been made, condition, facilities, amount, joint debt and fixed expenses.
- The broker sets an indicative price based on the inspection, knowledge of the local area and property statistics for similar properties where you are selling.
- You will receive an e-valuation, which both you and your bank can access.
Get an estimated property value directly in the mobile bank
Your property value is more than a number, it is many people's most important financial investment and a key to new opportunities.
Property value gives you an overview when you are planning to sell your property. Then you know more about what you can expect when you need to test the property market.
That is why we have made it simple: You can check an updated, estimated property value directly in the mobile bank.
DNB Eiendom
Gives you access to the largest number of home buyers in Norway
Advisory services from local and skilled estate agents
A secure, straightforward and simple sales process
Become debt-free and save for your dreams at the same time?
Yes please, both! With a few simple steps, you can reap the benefits of combining debt repayment and saving.
Wondering whether you should pay down your debt or save? We Norwegians tend to take out maximum loans when buying a home and rank among the world leaders in private debt generally. You are not alone in thinking that you cannot afford to save as long as you have to service interest and repayments on loans. But in reality, it does not necessarily have to be a choice between one or the other – the smartest approach is to do both at the same time.
Home Renovation
Home renovation can quickly become more expensive than expected. Therefore, it is wise to have a financial renovation plan.
What Does It Cost?
Home renovation can be an exciting, but also costly process. Costs vary depending on several factors, including which rooms or what you wish to improve, the extent of renovation required, and whether you plan to do the work yourself or hire professionals.
It can be wise to:
- Get a picture of the scope of the renovation
- Consider whether you can do some of it yourself
- Compare quotes
- Have a budget with a buffer
- Know which materials you want to use
Do you have the funds or do you need a loan for the renovation?
There are different ways to finance a renovation.
For example, you can:
- Borrow extra on your home loan
- Take out a favourable Green Loan if you need to carry out energy efficiency improvements
- Consider a separate construction loan
- Consider a credit card or consumer loan
- Use saved funds
Does it cost more than you can afford? Then you should reconsider or make changes to what you want to renovate – or consider more alternatives for financing the project.
Does Renovation Increase Your Home's Value?
If you have carried out extensive renovation of your home, it may be worthwhile to obtain a new valuation. If your home is worth significantly more than before, you may in some cases be able to secure a lower interest rate on your mortgage, as you can offer greater security to the bank due to your reduced loan-to-value ratio.
Why pay down debt?
When you pay down debt, you get a guaranteed, risk-free rate of return in the form of lower debt. Your finances become less vulnerable to interest rate fluctuations in the future – the benefit is a more predictable and more robust financial position in the long term. And of course, it's a good feeling that the day when you no longer have to pay instalments and interest rates is getting closer.
Get rid of the most expensive debt first
To start your journey towards the plus side, you should first prioritise paying down expensive consumer and credit card loans. If you have several, it's a good idea to refinance and consolidate them into one loan with better terms. That way you'll get an overview and probably lower costs overall.
Why save?
Even though it is important to pay down debt, it is important to start saving. Not only does it provide financial peace of mind and freedom. A paid-off loan does not automatically provide funds to live the life you want and fulfil your dreams for the future, such as a long-awaited holiday abroad or purchasing a holiday home in the mountains or by the sea.
Take advantage of the opportunities
If you have a mortgage and a loan-to-value ratio of 60% or less, you can consider requesting interest-only periods to create room for saving, for example in funds. Another alternative is to use the difference that arises as a result of, for example, low interest rate levels for saving. Calculate how much you save per month at today's low interest rates and put the surplus into a savings arrangement, for example a monthly transfer corresponding to the difference for fund savings or another savings form that suits you.
Buffer to avoid expensive loans
An important savings goal for everyone who wants solid personal finances is to save for unforeseen events and sudden expenses in a buffer account. By saving up a buffer, you get money that can be quickly available if you need it, and it is smart to be able to avoid taking out expensive loans in the future. To build up a buffer or start short-term saving for something you want, you can set up monthly transfers to a savings account directly from your salary account on payday. If you are saving more long-term and have a time frame of at least five to ten years, it is smart to consider saving in funds.
Own or rent?
Consider, among other things, how long you plan to live in one place. We have gathered some points about the advantages of owning and renting. See what suits you best.
Six reasons to own
- You participate in the housing market and can achieve capital appreciation, but you may also risk a price decline
- Repayment of your mortgage is a form of saving
- Your housing situation becomes more predictable. You decide when you want to move out, provided that you service the loan and joint expenses
- You have the opportunity to increase the property's value by upgrading, renovating or extending
- As a homeowner, you can rent out all or part of the property and reduce your housing costs
- If you have a mortgage, you receive tax relief on the interest expenses
Six reasons to rent
- You avoid being exposed to potentially falling property prices
- Your financial obligations are only tied to the period you rent the property
- Monthly rental costs for accommodation are often lower than if you finance the property with a loan
- It is easier to move from a rented property and you have lower moving costs than if you need to sell a property
- Refund of the deposit amount after the tenancy ends can be seen as saved funds
- You avoid the responsibility associated with maintenance, insurance, improvements and similar matters
Financing of cabin and second home
How to maintain your home
Maintenance is damage prevention in practice, and important for your insurance, the value of your home and your everyday finances. Did you also know that you are responsible for maintaining your home and reporting damage when it is discovered? Home insurance policies primarily cover sudden and accidental events that lead to an insurance claim. Therefore, it is important that you regularly carry out maintenance and damage prevention, so that you have an overview of faults and deficiencies, or wear and tear that may occur.
Get advice on how to maintain your home, what you should check both inside and outside, and what safety measures you should take.
Insurance when buying and selling a home?
Home buyer and home seller insurance are policies arranged by a broker when buying and selling a property. These policies can provide peace of mind by allowing you to leave any disputes to professionals, but you may already have sufficient cover through your home insurance policies. Remember to read the terms carefully and feel free to ask one of our advisers for insurance advice.
Home buyer insurance
Home buyer insurance is essentially a legal expenses policy that provides legal assistance and covers legal costs in the event of a dispute with the seller. A dispute relates to faults and defects that give rise to claims against the previous owner and matters disclosed in the property's sales particulars.
Home Seller's Insurance
When you sell a property, you are responsible for significant or hidden defects in the property. Even if you are not at fault, you may still be held liable. A home seller's insurance is a liability insurance that protects you against compensation claims for defects and deficiencies you were not aware of.