Currently there is an important growth in the Spanish market in the sale of homes, this is due to an excellent economic boost of families and the reduction of prices in real estate.
But, to have a longed for house, many people decide to ask for a mortgage, but it is important to consider many aspects before acquiring a debt or credit to buy any kind of property.
Before going to a bank to apply for a mortgage, you must be responsible and ask yourself 3 questions that will help you make the best decision.
Have you asked yourself these questions to be sure of acquiring a mortgage in a bank?
1. What is the amount of the mortgage that I have the ability to pay at the specific time?
We can all be attracted by the idea of having a well-furnished house, with access to the swimming pool, gardens or other facilities, but really, we must analyze well what is the value of a property. Economists advise that credits should be acquired with full responsibility, and should not harm personal financial stability.
Many people who choose to pay a mortgage, decide that payments are made every month, which means paying the credit in a period of 30 to 40 years respectively. The repayment of the debt can be a little showy and affordable to the client, but the longer it takes to pay a mortgage, the more interest that must be paid.
Therefore, it is advisable that you analyze well the future investments, so that you buy a house without getting into debt, this is because, if you pay a mortgage for more than 30 years, for a house that has a value of 100,000 euros, you would reach pay up to 200,000 euros.
Our ideal advice is that you acquire a mortgage to pay it to 20 years and that the fee for it should not be greater than a quarter of your monthly income.
2. What is the best interest for this loan?
Mortgages are available in the financial sector to be paid through three types of interest, fixed, mixed or variable.
Can there be a better interest rate to make the debt more affordable? It depends.
For example, with fixed interest you will know with certainty what your fees are to pay in 20 years, but this interest is generally greater than variable interest. If you plan to amortize the mortgage acquired in the first few years, variable interest is more appropriate. Also keep in mind that if the Euribor goes up, your mortgage fee will rise.
3. What are the additional costs you have to pay?
The amount that has not been financed by the banking institution. Generally banks only lend 80% of the total value of the house. Which means that you have to save 20% to pay the remaining price of the good. An example of this is that the house costs 120,000 euros and the bank makes an appraisal of the property in 110,000 euros, you must have a saving of 40,000 euros.
You also have to pay for registration and notary services. Taxes for legal expenses range from 10 to 12% of the total amount of the mortgage. New houses require payment of 10% VAT, if it is protected housing, only 4% VAT is paid.