Embarking on the journey to property ownership in a foreign land can be both exciting and daunting. If you’re an expatriate dreaming of owning a home in the enchanting archipelago of Indonesia, understanding the essential steps for obtaining a mortgage is crucial.
Indonesia’s burgeoning economy, coupled with its diverse real estate market, offers expatriates a wealth of opportunities. In this article, we will walk you through the steps to becoming a property owner in Indonesia, outlining the essential steps required to secure a mortgage.
Introduction
The mortgage submission process in Indonesia commonly takes five to fourteen working days after the bank gets the application form and debtor documents.
The more the debtor completes their documents, the faster the bank processes their credit. Before the bank approves the loan, here are the mortgage steps in Indonesia that everyone should know:
Steps of a mortgage application process in Indonesia
In order to get a mortgage in Indonesia, the applicant must follow these steps in the application process:
SLIK Checking Process
When the borrower wants to apply for a mortgage, before moving on to the next step, they must pass the SLIK check, or BI Checking in Indonesia, by the bank to which they want to apply for the mortgage. This step takes one to two days after the borrower gives their identity card and NPWP. After the result is out, the borrower can complete the documents needed to continue the mortgage process. Please note that there will be different policies about the passing score in SLIK Checking between the banks.
Appraisal Process
This process will be carried out if you pass the BI check. As the name implies, appraisal is a process in which the bank assesses the property value that will be used as mortgage collateral. This step is taken if you buy a property from an individual or developer who does not work with a bank.
Credit Analysis Review
In this process, the complete document will be reviewed by a bank analyst. The completeness and accuracy of the document will be checked by the bank. The borrower will be interviewed by a bank analyst before the analyst interviews company HR for an employee or a company client if the borrower is a self-employed employee and has close family on the emergency contact application form. This might take two to three working days.
Credit Approval
After conducting an analysis based on several considerations, the bank will then decide whether the mortgage application can be approved or not. If approved, the process is not finished yet. During this time, the bank will give you an offering letter and a SPK (Surat Perjanjian Kredit) that contain the documentation and agreements, which you can learn about and take advantage of to get cheaper fees. And after all the fees and interest rates are settled, the debtor and bank will agree on the date of the credit agreement. Sometimes the bank gives fourteen to thirty working days before the offer letter expires.
Credit Agreement
A credit agreement involves the debtor (and the debtor partner) as the applicant, the bank representative, and the home seller’s or developer’s representative. This process must be carried out in front of an appointed notary if the debtor bought secondary property. All the authentic documents must be brought by the debtor so the bank and notary can verify the authentication. The first installment will start 30 days after the signing.
Timeline
- Select your property or you can chat us for the available property.
- Prepare your ID card to check the credit score before move onto the next step. The result takes 1-3 working days.
- After the result came out, you can discuss about the bank option (product, rate, benefit) that suit you with our advisors.
- Complete the supporting document before submitting to the bank.
- After the bank approve the loan, you will get the schedule to sign the loan. The first installment must paid after 30 days from the day you sign the loan with the bank.
What happens after the loan is approved?
These are the steps that the applicant must know or follow once the loan is approved by the lender:
Loan Disclosure
The lender will provide you with a loan estimate and a closing disclosure in its offering loan letters, which outline the terms, interest rate, closing costs, and other details of the loan. Review these documents carefully because, in this step, you will be given 14 working days to review and negotiate the price.
Conditional Approval
While your loan may be approved initially, it might be subject to certain conditions. Common conditions include providing additional documentation or meeting specific requirements.
Closing Preparations
Once all conditions are met, you will work with the lender and property agent involved in the transaction to schedule the closing date. The lender will prepare the final loan documents and coordinate with the PPAT/land deed official to handle the closing process. In this step, you must finish paying the property tax for purchasing a secondary home, but if you are purchasing a primary/new home, you don’t need that.
Document Signing
On the scheduled date, you will attend the credit agreement signing, or in Indonesia, Akad. This includes the promissory note, mortgage or deed of trust, and other required paperwork. You’ll also pay the closing costs and any remaining down payment. And then your first installment will start 30 days after the document’s signing.
Found this article interesting? Then check out our other useful articles about visas here!
Exploring Possibilities of The Expat Mortgage in Indonesia
Your Path to Property Ownership: Essential Steps for Obtaining Mortgage in Indonesia
Decoding Indonesian Mortgage Products: The Essential Guide for Homebuyers
Top Banks that Partnered with LetsMoveIndonesia for Mortgage
Get Your Desired Mortgage with LetsMoveIndonesia: What You Need to Know
