- The conditions are very favorable at this time, both to apply for a variable rate mortgage as a fixed rate.
- Better to get to it with information, caution and long-term look.
- Adicae gives ten good tips for hiring a mortgage and doing it well.
Buying a flat is one of the most important economic decisions we make and to do so, we must measure and weigh all the factors. And to do it happens – almost always – by the signature of a mortgage.
At a time when their conditions are very favorable -euríbor very low for variables and low rates for landlines-, we must not neglect. Better to get to it with information, caution and long-term look. The Association of users of banks, savings banks and insurance in Spain (Adicae) gives ten good advice.
Compare before signing. Before signing, you should compare the conditions offered by different banks, guarantees that require, payment facilities, concessions for the delay and any other aspect to create a sort of list of pros and cons of what each entity puts at your disposal, which It will also serve as a negotiating weapon when the time comes.
Shorten the deadlines. You must try that the duration of the loan is not excessive. A 40-year mortgage may seem appetizing for lower fees, but keep in mind that the family situation may vary over time, in addition to the interest charged to you.
Consider the variation of the Euribor. Currently, the Euribor, the type of interbank loan that most mortgages use as a reference, is unusually low. The progressive economic recovery can lead to an increase in the rate, which reached 5.36% in 2008.
Negotiate the conditions. The bank is the one that decides the conditions but that does not mean that you can negotiate each one of the terms of the mortgage. Never accept too high differentials. There are alternatives such as hiring other lower annual cost products such as credit cards or savings products.
Examine the fine print. It is essential to analyze well, in detail and if necessary with the help of a lawyer or real estate expert each and every one of the conditions of the loan. Pay special attention to the clauses considered abusive and whose application is illegal, as is the case with some ground clauses, which set a minimum interest that the mortgage can never fall. They are illegal when they have not been reported transparently and clearly to the consumer.
You will not ask for more than 80%. Experts say that it is not convenient to ask the bank more than 80% of the value of the appraisal of the property. You must have saved and available to pay at least 20% of the price. You will have a lower mortgage burden and greater financial slack before and after acquiring the home.
Monitor the fees. More than worrying about the monthly fee, we must pay attention to the conditions that could change this monthly amount upwards or downwards: the base interest rate, the differential, the clauses of other types, mitigating factors, etc. We also have to monitor the growing quota, a percentage increase to add each year that can imply an important additional outlay.
You will not stop paying. Many mortgage contracts offer initial grace periods, where certain payments can be deferred. Consider it if necessary, maybe it can be attractive later or you can give it up in exchange for other advantages.
Save 10% of the house. Keep at least 10% of the value of the property in your checking account. This will allow you to have a relatively comfortable financial position and avoid many fears. A cushion of savings for family or economic contingencies that may occur during the real estate loan.
Renegotiate your mortgage. The mortgagee has the right to demand renegotiation. Current regulations include assumptions in which the bank must accept the revision of conditions beyond what is established in the original contract: when all the members of the family unit lack income derived from work or economic activities and when the mortgage payment results greater than 60% of the net income received by the whole mortgaged family.