we are going to give you a small summary of important things that you have to take into account when applying for residential home loans because it is important to research the best option for a mortgage that is suited to you specifically. For most people, buying a home is the most important purchase decision of their life. Unfortunately, few of us have the money to pay it off without having to resort to a loan.
The first thing to keep in mind is that the bank may grant you less credit than you had in mind.
To begin with, it is unlikely that the bank will offer more than 80% of the value of the purchase or appraisal of the home (usually the lowest of them), so you must bear in mind that if you do not have the remaining 20%, it is not going to work out.
To summarize: First and foremost, do numbers before you start, analyze how much you can contribute from your savings, and take into account your economic outlook for the next few years.
Interest rate and benchmark index (and spreads) of mortgages Interest rate: It is the percentage that you will have to pay to the bank for lending you the money. Currently, interest rates are quite low. It is good news in principle because it assumes that it will “costless” to ask for money from the bank.
Here another important term comes into play: Differential. Your bank establishes an official interest rate as the basis for the loan. It is the so-called benchmark index.
Depending on how high or low that differential is, the interest you have to pay will be higher or lower. This, together with the price of the reference interest rate (which also rises or falls depending on the economic situation) make up the total price that your loan will cost you.
At present the normal thing is that your interest rate is low and your differential more or less high. If you know people with pre-crisis mortgages, you will surely see that their spreads are much lower. This is because when they signed their home loan, the benchmark interest rate was much higher. This is important to know because if at some point you buy a home and they allow you to subrogate the mortgage loan from the previous owner, it may be a good decision.
It is also possible to contract your mortgage at a variable rate or at a fixed rate. The difference is that the former fluctuate with the economy, so sometimes they can be high (with which you would pay more) or low as now (with which you would pay less). If the rate is fixed, it is always the same and you always pay the same, regardless of the economic situation.
Right now, fixed rate mortgages have a higher interest than variable rate mortgages. However, if in a few years, the rates go up it may be more advantageous compared to a variable.
As we all know, almost any deal you make with a bank is subject to fees and charges. The good news is that in the case of the expenses and commissions of a mortgage loan, it is possible to negotiate some of them and make them a little more favorable.
It is important to know the conditions of the commissions for study, opening, early or partial cancellations, notary fees, real estate (if you have chosen to do the procedure through them …) Some can be negotiated; Above all you must have to Keep in mind that you can request a report on all of them to have a complete picture of how much your loan is going to cost you.
Another of the best known practices in mortgage loans is the inclusion of ancillary services: direct debit payroll, receipts, hire cards or, as we will see a little later, life insurance that guarantees the bank the collection of the mortgage.
In principle, according to the Law, a bank cannot force you to hire any service as a condition to grant you the mortgage loan, except fire insurance that is required by law, so what they do is lower the differential on your mortgage by “rewarding you” For the accessory products you hire. In this case, it is important to do the math because lowering the spread does not always save you money.
This happens very often with life insurance. On many occasions the bank will require you to take out a certain mortgage life insurance with which to guarantee the collection of the same. The first thing you should know is that this insurance is not mandatory (although it is highly recommended to avoid that, if the buyer dies, the debt passes to his heirs), but above all, it is not mandatory to contract it with the bank.
The most important thing: if you have doubts, find out. You should not be in a hurry to sign your mortgage, no matter how much you want to buy your house or how badly you think that financial issues are given to you. You’re probably going to be spending a lot of time on that loan, so it’s important not to leave any loose ends.
Your bank manager must respond to you and give you the information and, currently, there are many associations or internet pages where you can collect information.
Also do not forget that you can ask the notary before signing (preferably not the same day to be able to inform you without pressure) and that the bank cannot force you to choose a special one.
