Calculate well the bonusesThe bonus is the second aspect to look at in order to know if a mortgage is convenient. Many banks offer a reduced interest rate (bonus) if you take out several of their products, such as insurance, cards and accounts. If you do not subscribe to them or cancel them during the life of the loan, the rate applied can go up by up to one percentage point or even more.
It is also advisable to avoid the commissions charged for modifying the mortgage after it has been contracted: for bringing forward payments (total or partial early repayment), for agreeing a change of conditions (novation) or for changing the loan to another bank (subrogation).
However, in order to obtain the best conditions, it is essential to demonstrate a solvent financial profile. The applicant must have saved around 30% of the price of the house he/she wants to buy, have a stable employment situation and have sufficient income to be able to pay the installments without difficulties.
Up to what age can you mortgage a house?
Buying a home is a significant initial outlay for the pocket that many cannot afford. And it is that the acquisition of a house demands to have saved, at least, 20% of its price. Currently, the high price of rents and the precariousness of labor contracts has meant that most young people who are considering buying a home have to discard the idea due to lack of resources.
This is why applying for a mortgage with 100% financing is a complicated task for the buyer. However, there are several ways for those who do not have the necessary savings. Some of the keys are found in the appraised value of the property, the solvency of the client or the financial intermediation.
The initial outlay involved in acquiring a home is one of the biggest drawbacks encountered by the buyer when deciding whether to buy or rent. Given that banks usually grant a maximum of 80% financing, most customers must have a cushion of at least 30% of the value of the property. And the fact is that, in addition to needing the 20% that the bank does not lend them, they must also face a series of initial expenses and taxes. These include:
How to get a mortgage
In addition, when applying for a mortgage, another variable is important: the borrowing capacity of the applicant or applicants. And the fact is that, although the norm says that the quota should not exceed 35% of the monthly income so that it can be paid comfortably (that is to say, that the mortgage does not ‘eat’ more than a third part of what is earned), the banks are conscious that, the older the person is, the greater the capacity of indebtedness should be.
When a mortgage is signed, the person is subject to having to comply with the amortization term that has been stipulated. When the mortgage is fully amortized, the debt will be extinguished and, at the same time, the guarantee will be extinguished. However, it must be taken into account that the solvency status of this charge on the property in the land registry is not automatically erased. Therefore, in order that the liberation of loads takes place it will be necessary to go to the Registry of the Property to, in an act form, to face the expenses cancellation mortgage. Read more
“The most important thing, always, is to be very clear about what we want a mortgage for and, in the case of having a senior profile, to be sure if it is really necessary,” advises Colombelli, from iAhorro. “Maybe there are other possibilities that, in certain cases, could be more interesting, such as presenting yourself as a guarantor instead of the holder, if the mortgage is made to help your children; or selling the bare ownership of your own home [ceding the ownership, but not the usufruct], if the purchase of another home is for yourself; or taking out a reverse mortgage [receiving a capital or a monthly rent by putting an already acquired and unencumbered home as a guarantee]. It will depend on each case,” he insists.