How to Prepare for Buying an Apartment or House
Financial preparation, mortgage pre-approval, budgeting and reserves, priorities and compromises. A practical guide to everything you should settle before searching for a property.
Before you even start browsing listings, get your finances in order. Calculate your realistic budget including reserves, secure mortgage pre-approval, and write down your priorities and compromises. A prepared buyer searches strategically, acts quickly, and doesn't fall in love with a property they can't afford.
Why Start with Preparation, Not Search
Many people do it backwards: they fall in love with a specific apartment first and only then figure out if they can afford it. That's a path to disappointment and unnecessary stress. A prepared buyer has three major advantages:
- Searches within a realistic budget — doesn't waste time on properties out of reach.
- Acts quickly — with attractive properties, often the one with financing already in place wins.
- Negotiates from a position of strength — sellers take seriously a buyer who has their finances sorted.
Preparation can be divided into four steps: financial preparation, mortgage pre-approval, budgeting with reserves, and setting priorities. Let's go through them.
Step 1: Financial Preparation
Before visiting a bank, get an honest picture of your finances. It's not a boring formality — it's the foundation for the entire decision.
- Calculate your household's net monthly income — what actually reaches your account.
- List regular expenses — housing, food, transport, existing loan payments, insurance, savings.
- Map out existing obligations — credit cards, leases, loans. They affect how much the bank will lend you.
- Find out how much you have in savings — money you can put toward the purchase.
- Check your payment history — late payments in the past may concern the bank. Better to know in advance.
Budget for Extra Costs
The purchase price isn't the only expense. Several items come with buying a property, and people often forget them:
- fees related to arranging the mortgage and property valuation,
- property insurance (banks usually require it),
- possible taxes and fees related to transfer,
- costs of legal or notary escrow,
- moving, necessary repairs, and furnishing.
Verify specific fees and taxes with an advisor or bank — rules and rates change over time and vary by situation.
Step 2: Mortgage Pre-Approval
If you're not paying the full amount from your own funds, mortgage pre-approval is the most important step of preparation. Pre-approval (or preliminary estimate) is a non-binding estimate from the bank of how much they're willing to lend you and roughly on what terms.
Why Sort It Out Before Searching
- You know your ceiling — you know what price range makes sense.
- You're faster — with sought-after properties, often the one with financing ready wins.
- You avoid disappointment — you won't fall in love with an out-of-reach property.
What to Prepare For
Banks look mainly at two things: how much you can afford to pay back relative to your income and obligations, and what portion of the price they want to finance relative to the property value. You typically have to cover part of the purchase price from your own funds.
The central bank does recommend certain limits to banks. For mortgages on owner-occupied homes, banks today typically finance part of the price and you cover the rest from your own funds, with somewhat more lenient conditions for younger applicants. These rules change over time and are recommendations that each bank applies its own way, so always verify specific percentages and limits directly with the bank or a mortgage advisor for your current situation.
Tip: Compare Multiple Offers
Don't rely on the first bank. Interest rates, fees, and willingness to lend vary between banks. A mortgage advisor can compare multiple banks' offers at once, just verify whether they work independently or represent one institution.
Step 3: Budget and Reserves
Pre-approval tells you the maximum the bank will lend. That's not the same as the amount you want to afford. A sensible budget is usually lower than the maximum.
How to Set a Payment That Won't Drain You
- The payment should fit comfortably in your budget even in a month with unexpected expenses.
- Remember that the interest rate can change over time (after the fixed period ends).
- Leave room for regular costs of living in the property — utilities, contributions to the maintenance fund for apartments, upkeep for houses.
Reserves Are Essential
The biggest mistake is spending every last penny of savings on the down payment. Keep a reserve after purchase in two ways:
- Operating reserve — money for several months of regular expenses and payments in case of income loss.
- Property reserve — for necessary repairs, furnishing, and things that appear right after moving (heating issue, new washing machine, painting).
Property ownership is a long-term commitment, and surprises come with it. A prepared reserve is the difference between an inconvenience and a real problem.
How big a mortgage can I get?
Maximum loan and property price for your income
Your savings are the limit here — a higher property price would break the LTV cap.
Indicative estimate only — actual figures depend on your market, contract and provider.
Step 4: Priorities and Compromises
The ideal property that checks every box and fits your budget usually doesn't exist. So before you start searching, clarify what's essential and where you're willing to compromise. Split your requirements into three groups:
- Must-haves — without them you won't consider the purchase (e.g., number of rooms for your family, proximity to work or school, maximum price).
- Nice-to-have — you want them but can live without them (balcony, elevator, parking space).
- Bonus — they'd be nice but don't decide anything (modern kitchen, nice view).
What Can Change and What Can't
A simple rule helps when sorting:
- What can be changed with money or time — kitchen condition, flooring, layout, wall color — treat as a possible compromise.
- What can't be changed — location, orientation to cardinal directions, noise from a busy street, upper floor without an elevator for an older person — belong more among must-haves.
Write this list down. When you visit properties, it will protect you from impulsive decisions and keep you from overlooking something actually important to you.
Summary
- Start with preparation, not search — a prepared buyer searches strategically and acts quickly.
- Get your finances in order and budget for extra costs, not just the purchase price.
- Secure mortgage pre-approval and verify specific terms directly with a bank or advisor.
- Set your budget below the maximum and always keep reserves — both for operations and for the property.
- Write down priorities and compromises in advance so you can decide at viewings with a clear head.
Once you've completed these four steps, the actual search is just the enjoyable part. And feel free to use AI for calculations and comparing specific properties.
Frequently asked questions
How much of my own money do I need to buy a property?
It depends on the bank and property type. Banks typically don't finance the entire purchase price; you have to contribute part from your own funds. Beyond that amount, budget for extra costs: appraisal fees, mortgage arrangement fees, insurance, possible taxes, and reserves for repairs and furnishing. Verify the specific percentage and conditions directly with a bank or mortgage advisor, since they change over time.
What is mortgage pre-approval and why arrange it before I start searching?
Pre-approval (or preliminary estimate) is a non-binding estimate from the bank of how much they're willing to lend you and on what terms. It lets you search only in your realistic budget, negotiate as a prepared buyer, and respond faster than others to attractive properties. It saves time and stress and prevents you from falling in love with a property you can't afford.
How much financial reserve should I keep?
There's no universal number, but the rule is: never spend your savings down to zero. After buying, you should have a reserve for several months of regular expenses and payments in case of income loss, plus separate funds for necessary repairs, furnishing, and moving. Property ownership brings regular and unexpected costs, so it's good to be prepared.
Should I find a property first or arrange financing?
First, get your finances clear and secure mortgage pre-approval. Only then search. When you know your ceiling and have preliminary bank approval, your search is targeted, negotiations are faster, and you avoid disappointment from properties beyond your reach.
How do I set priorities when I can't find a property that meets everything?
Split your requirements into three groups: must-haves (without them you won't consider it), nice-to-have (you want them but can compromise), and bonus (they'd be nice but don't decide anything). What can be changed with money or time (kitchen, flooring, layout) treat as possible compromises. What can't be changed (location, orientation, street noise, upper floor without elevator) belong more to must-haves.
Can artificial intelligence help me prepare for buying?
Yes. An AI assistant like ChatGPT, Claude, Perplexity, or Gemini can help you calculate budget and reserves, explain mortgage terms clearly, and compile questions for the seller and bank. When you add AssetLog (assetlog.ai), an open platform whose listings are read by AI search engines, AI can additionally find specific properties matching your budget and priorities and compare them. AssetLog listings are open to AI assistants.