6 Tips to choose the best mortgage credit
Each financial institution offers mortgage loans with different characteristics, then we give you some tips that will help you to know what you should compare to find the best mortgage credit.
1. Make sure you have several options.
First of all, you must have several options for mortgage loans from different financial entities, based on your profile. Not sure how to get them? We tell you how to request a mortgage in this article . If you do not have several options, you will not have much to choose from, right?
2. Compare the interest rates.
It is one of the most important factors to consider, however it should not be the only selection criteria. The interest rate tells you how much it will cost to receive the loan to buy your home. In Peru, two concepts related to the interest rate are handled: the TEA and the TCEA . The TEA (effective annual rate) represents the interest that the financial institution will charge you, and the TCEA (annual effective cost rate) represents the interest (TEA) plus other additional expenses that you would have to pay.
So, it is better that you compare the TCEA of each mortgage credit option. This way you will have an exact idea of what the loan will cost you, including interest and other expenses, such as credit and property insurance.
3. Compare the rates for insurance of relief and property insurance
These insurances are part of the expenses of a mortgage loan and their values also vary among financial entities. Both are contemplated within the TCEA.
If you already have life insurance, you can endorse it to your mortgage credit to not pay again for one. This way you will avoid incurring an unnecessary expense. Endorsing a policy has a fixed cost, is paid only once, and will vary depending on the financial institution.
4. What is the payment term you need?
Do you already know how old you want to ask for the mortgage loan? Some financial entities lend only in the short and medium term, such as 5 – 10 years. Other entities lend to 20 years, and there are even a few that are already lending to 30 years. Then consider this feature, you can fit with your payment plans.
While it is true that taking a loan for a shorter term will make your monthly payments to be higher, in the long run you will pay less interest than in a longer term loan.
5. Take into account other expenses and commissions
For example, some banks will charge you a commission to change the term or currency of your loan. In addition, as part of the process to apply for a mortgage loan , a title study is done, some banks will charge you a commission for this study. As well as these expenses, each entity may have other extra costs that are necessary to know.
6. Experiences of friends and family.
Finally, it is very important to know the ease with which you can communicate with the financial institution. You will not know this until you have chosen a mortgage, but you can ask friends and family about their experiences acquiring mortgages with the entities you are considering. The comments that they give you will help you to get a glimpse of which entities make the most effort to solve doubts and help mortgage loan clients. Beyond the number of offices that an entity may have, verify the facility to contact the corresponding area by mail or phone, and above all, validate the speed with which they usually respond.