House price (Bostadspris/köpeskilling): The house price is the price you pay for your home, and is sometimes called the purchase price. What you actually pay is determined by a bidding process: you can pay more or less than the price in the ad.
Downpayment (Kontantinsats): You can borrow up to 85 percent of the housing price. The other 15 percent you must provide yourself. This amount is called the downpayment.
Loan to value ratio or leverage ratio (belåningsgrad): How large a share of your home value is mortgaged. If your home is worth SEK 1 million and you have SEK 500,000 in housing loans, you have a 50 percent leverage ratio (500,000 / 1,000,000 =50%)
Personal liability (Personligt ansvar för lån): You are personally responsible for making loan payments. If you have borrowed to purchase a house, you mustpay interest and amortization payments regardless of the value of your house. This means that you have to pay your debt even if housing prices go down.
Tax deduction for mortgages / interest deductions (Skatteavdrag för bolån / ränteavdrag): The interest deduction is a discount that the state gives you on your interest costs. The deduction applies to most loans (but not student loans), and simply means that the cost of borrowing is reduced. Put simply, 30 percent of your borrowing costs can be deducted from your tax. This is normally done by receiving a tax refund, but you can also receive the deduction during the year.
Fixed and variable interest rates (Fast och rörlig ränta): You can choose between fixed and variable interest rates on your mortgage. If you choose a fixed interest rate and tie your interest rate, you know what you are going to pay - your interest costs are calculated through the fixed interest rate. If you choose a variable interest rate, the interest rate changes when the interest rate level in society changes. This means that your interest expenses also change as the interest rate changes.
Fixation period for fixed loans (Bindningstid för fasta lån): You can fix the interest rate for several different time horizons, e.g. for one year or five years. The fixation period is the number of years you have a fixed interest rate. Keep in mind that you generally pay more the longer you fix the interest rate.
Interest rate differential compensation (Ränteskillnadsersättning): If you fix the interest rate, you have promised the bank to pay a certain interest rate during the fixation period. If you want to sell your home and pay off your home loan before the commitment period ends, you must pay the bank for the income it would have had if you continued to pay your loan. This compensation is called interest difference compensation (the compensation is based on the difference between what you promised to pay and what the interest is today).
Loan promise and loan application (Lånelöfte och låneansökan): With the help of a loan promise, you know how much you can borrow and buy a home for. A loan promise is free and you should get one before you go on tours. Some brokers will even require you to have a loan pledge before you bid on a home. The loan promise is valid for a limited time, e.g. three or six months. The fact that you have a loan promise from your bank does not mean that your bank will give you those conditions - the promise is therefore not binding. In order for the loan promise to become binding, you must turn it into a loan application at your bank. Read more at Consumed.
Advance payment (Handpenning): Once you have bought your house, you must make an advance payment. An advance payment is a (partial) payment of the purchase price, and serves as a collateral for the seller, so that they can be sure that you will actually buy the home. The advance payment should normally be deposited in the broker's account a few days after you have signed the contract with the seller. If you do not have money available for the advance payment when you sign a contract, you can ask the bank for a advance payment loan (handpenningslån)
Bridge loan (Överbryggningslån): A bridge loan is a loan you can get if you take over your new property before your old property is sold. The bridge loan is repaid as soon as the old property is sold.
Loan insurance (Låneförsäkring): A loan insurance is an insurance that is paid out if you cannot pay the monthly cost of your home loan, e.g. due to involuntary unemployment or illness. In the event of death, the entire loan is normally repaid if you have a loan insurance.
Amortization (Amorteringar): Amortization payments are made to repay your debt and means that your loan amount is reduced. You can amortize on any type of debt, not just mortgages. When you amortize a mortgage, you build up your wealth, so you get richer when you repay. When you amortize, your interest costs also decrease, as you pay interest on a smaller debt.
Amortization requirement (Amorteringskravet): Sweden has a minimum requirement for how much you must amortize. The requirement depends on your loan-to-value ratio. If your loan-to-value ratio is over 70 percent, you must amortize two percent of your loan per year. If your loan-to-value ratio is between 50 and 70 percent, you must amortize one percent of your loan. If your loan-to-value ratio is less than 50 percent, you do not need to amortize at all. In addition, there is an additional requirement: if your mortgage is greater than 4.5 times your gross income, you must amortize an extra one percent per year, regardless of your loan-to-value ratio.
Gross income (Bruttoinkomst): The stricter repayment requirement states that you must repay an extra one percent per year if your mortgage is greater than 4.5 times your gross income. Your gross income is determined primarily by the Swedish Tax Agency and is based on your earned income (in principle your taxable income before tax).
Tenant-owner Association (Bostadsrättförening): When you buy an apartment in Sweden, you normally buy the right to use a home. You do not buy the home itself when you buy an apartment, but you buy membership in the tenant-owner association that owns the property (the land, the house, the common areas, patios and any premises). The tenant-owner association is governed by a board that makes decisions about the daily operation of the property. When you buy a condominium, you must be approved by the association, and there are some restrictions on what you can do with your apartment. It is therefore important that you review the tenant-owner association's finances and regulations before you buy.
Property ownership (Äganderätt): Property ownership is when you own your own home, e.g. a house. It is the usual form for buying a house. You can decide for yourself whether to sell or whether to rent out the home. You are also responsible for the renovation and maintenance of the house, which means that you can get higher operating costs than when you live in an apartment.
Ownership of apartments (Äganderätt för lägenheter): There are also apartments sold under property ownership, which then means that you own the apartment itself. If you own an apartment through ownership, you must be part of an association that takes care of the common parts of the house, e.g. exterior roofs, facades, stairwells, storage rooms, and other common areas.
Fees to tenant-owner associations (Avgifter till bostadsrättsföreningar): If you buy an apartment in a tenant-owner's association, you must pay a fee to the association. The fee is used to pay for the daily operation, payment of possible loans and future renovation needs. It is the association board that decides what the fee should be.
Viewing (Visning): During a viewing, you can see the property you are considering buying. The realtor shows the home and answers your questions about the property, the tenant-owner association or the area. You usually have 30-60 minutes to review the property. Keep in mind that this is usually the only time you can see the property from the inside and make sure everything works. You can e.g. test if the stove works, or if the fridge and freezer are in good condition.
Buying a property by making a bid (Budgivning): Once you have decided to buy, you place a bid with the realtor. If there are several bids (one bid), you will have the opportunity to bid again if you did not have the highest bid. It is up to the seller to decide which bid they want to accept. The one who places the highest bid is usually the winner, but not always.
Inspection and duty to inspect (Besiktning och besiktningsplikt/undersökningsplikt): When you buy a house, you have a duty to inspect. This means that you should go through the house and look for faults. This must be done after you have made the advance payment but before the date of entry. The easiest approach is to use an inspector who can check for defects and if there is any renovation required. If you find fault, you can negotiate with the seller for a lower price. You can also withdraw your purchase, but then you usually lose your advance payment. The seller is not responsible for errors that are detectable, but only for so-called hidden errors. Hidden defects are defects that could not be detected by the buyer even with a thorough inspection. This applies regardless of whether the seller was aware of the errors or not. The seller normally has a 10-year liability to the buyer for hidden defects.
Access day (Tillträdesdagen): The access day is the day when the buyer gets access to the home. This is often when the buyer has to transfer the purchase sum. On the day of taking over, you as the buyer must go through the home with the seller to see that everything looks good and that everything is in accordance with the purchase agreement. You should e.g. check the final cleaning. You can read more about what applies on the day of access at Mäklare.se (in Swedish)
Cohabitation agreement (Samboavtal): A cohabitation agreement determines how the property and your things are to be divided if you are to separate from the person you live with or if one of you passes away. It is important to have if it e.g. is so that one of you paid more for the home or has taken out a larger loan in his own name. Read more at Hallå Konsument! (in Swedish)
Condominium supplement to home insurance (Bostadsrättstillägg till hemförsäkring): If you have an apartment, you usually need a apartment supplement to your home insurance. The insurance applies to property that belongs to the tenant-owner association but which you are responsible for maintaining. It can e.g. be water damage or leakage from washing machine or dishwasher. Sometimes the tenant-owner association has negotiated a tenant-owner supplement for all its members, which means that you do not have to take out such insurance yourself.