Latest Mortgage Rates

Latest Mortgage Rates


The real estate crisis plummeted mortgages, however, several factors suggest that in the coming years the hiring of these loans will increase. According to the consultancy Oliver Wyman and the Spanish Mortgage Association (AHE), the granting of new mortgages will reach 550,000 contracts per year between 2018 and 2010. Among other things, this upturn in the sector will be due to low interest rates and the improvement of the economy. At this time, the Euribor is at historic lows and, in addition, competition between entities has increased to improve the characteristics of the loans.

However, asking for a mortgage is a very important step, since it is possibly the most amount of credit you will ask for in your entire life. If you are one of those who are thinking about asking for a mortgage, follow these tips that will help you in the process .

Make sure you meet the requirements
At the time of granting a credit, the banks take into account certain essential requirements on the claimant. Before applying for the mortgage, you must make sure that you meet the profile and that the bank will not reject your proposal. Some factors such as age can limit you, since banks usually grant credit to people between 18 and 75 years . In addition, another circumstance that entities will take into account will be the income you have or the type of employment contract you have. You may have a better chance of getting the mortgage if you are undefined than if you are a temporary worker. Also, you should check if you are on an official defaulter list, many entities can reject you directly if you are in one of them because they consider you have a risk profile.

Prepare the necessary documentation
The bank will analyze all the information you provide, so it is convenient to prepare all the documentation required and provide concepts such as the level of income you have along with extra payments or annual bonuses. In addition, it is important to justify the periods in which you have not been working or have changed companies. From all the information you justify, the bank will decide whether or not you are a risk profile and the conditions that your credit will have. Normally, the bank will ask you, among other documentation, the DNI and Tax Identification Number (NIF), work life, latest payroll, last declaration of income and assets, annual and periodic VAT payments (only if you are self-employed) and receipts of payments of other loans you have.

Calculate the exact amount you need
Before asking for the mortgage, you must know what exact amount you need to pay for the home. For this you must bear in mind that the purchase of a house carries other costs such as, for example, the appraisal, the notarial or the registration in the Land Registry . This type of extra surcharges will increase the final money you disburse.

In addition, you should be aware that the vast majority of experts say that the bank should not be asked for more than 80% of the appraised value of the property . For this, you must have saved and available 20% of the price of the house. In this way, you will have a better financial situation. For its part, the bank does not usually lend 100% of the cost of the house and the loan does not usually exceed 80% of the value of the property, although this maximum may vary from one entity to another. On the other hand, the monthly mortgage payment should not exceed 40 or 50% of your monthly income , since you will find few entities that assume your risk profile before the possibility of default.

Pay attention to the small print
When you choose the mortgage you should look at something more than the publicity made by the bank and thoroughly examine the condition of the mortgage. Once you sign it, there will be no going back. For this, you can count on the help of a lawyer or real estate expert to guide you and warn about certain abusive conditions whose application is illegal, such as some ground clauses that are not clearly reported to the user , since they set a minimum interest.

In addition, you should also review some concepts such as extra expenses for additional products such as Home insurance . To apply for a mortgage, the law requires the home to have a home insurance that covers claims such as fire. However, you are not obliged to link the mortgage with one of the policies of the entity , so you can compare insurance on your own and hire the product that is cheaper for you. On the other hand, when calculating the total of what you will pay for your loan, you have to take into account the commissions, the money that the bank will charge you for the study, opening amortization or early cancellation of the mortgage.

Negotiate the terms of your mortgage
Although the bank is the one that decides the terms of the loan, you can try to negotiate terms of the mortgage that do not seem appropriate. For example, you can demand the dation in payment , which consists in the delivery of the mortgaged property to the bank to put an end to the debt . In this way, in case of not being able to assume the monthly payment in the future, the bank would only keep the house and you would not have to continue paying the outstanding debt.

Choose a mortgage that suits your situation
There is no single mortgage, but there are several types . The most widespread are the mortgage at a fixed, variable and mixed interest rate . The first one provides security because it keeps its interest rates unchanged, that is, throughout the duration of the loan, the fee payable will be the same because it is independent of the fluctuations of indicators such as the Euribor. However, they tend to be more expensive because the interest rates are higher, since in this case it is the bank that assumes the risks of interest rates going up.

On the other hand, the variable mortgage works in reverse to the fixed one, since it is the client who assumes the fluctuations of the Euribor . If this indicator is at low levels, the mortgage will be much cheaper. As for the mixed , it combines a fixed rate at the beginning of the loan that later becomes variable.

Compare mortgages before signing
The Association of users of banks, savings banks and insurance in Spain (Adicae) indicates that it is advisable to compare mortgages before signing . In this way, you can find the best conditions or facilities for payment of your loan. In you can find quickly and easily different entities with which to compare your mortgage.

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