Requiring a mortgage to acquire our home (or second home) is the most common since it is unlikely that we will have enough liquidity to make the purchase overnight.
Since we are talking about a completely rudimentary procedure, sometimes we forget a series of premises to take into account and this can cause us to either not act in the most intelligent way possible or to be deceived without realizing it, since we are obsessed with the new acquisition.
For this situation, this article will talk about practical advice to keep in mind if we are thinking of contracting a financial product of this caliber (mortgages) and thus benefit in all aspects, bearing in mind that at the end of the day we are borrowing very long term.
How much are you willing to pay for your new house?
Surely you have read on many websites of financial institutions that offer you up to 80% of the appraised value of the property. With this statement, assuming they offered you 100% of their expectations (that is, 80%), the other remaining percentage should come out of your own pocket. For example, if the house you are “in love ” is worth $ 300,000, the bank could finance at most $ 240,000. The remaining $ 60,000 must come out of your savings. You got it?
Find commissions close to Zero
A few years ago it was more difficult to find commissions approaching 0. But as times have changed and fewer are going to ask for a mortgage, banks have been forced to offer better conditions. In this case, it is better that you look for the bank that can offer you opening, subrogation and cancellation commissions as close to zero as possible.
How to spot good interest
The usual thing is that you keep those options that can offer you an interest rate of 2% maximum plus the Cream Bank. In addition, there are mortgages that are called intelligent which will assure you that even if the Cream Bank rises, your interest will no longer be fixed and will be reduced, so that your quota does not increase (or if it does, it does as little as possible). Here’s more information on types of mortgages.
Mortgage, and is it done?
No. The most common is that the bank you have decided to put conditions on you such as contracting other products to fully enjoy the benefits of your mortgage. They tend to be opening new accounts, linking cards, taking out insurance. You should keep this condition in mind to know if you are really interested in having any of these products (and the costs involved in maintaining them).
If you don’t see it clearly, don’t sign
It is important that you are clear from the first moment the conditions that you are going to sign. If when you have the contract in your hands you do not understand any of the clauses, you should ask without question.
We must be aware that we are going to sign something that will be decades with us and we are also talking about significant amounts of money. Therefore, it is better to be 100% safe than to be 80%.
Compare and then decide
Never stay with the first offer that the first bank you go to can offer you. The appropriate thing is to visit a minimum of 3 financial entities and see what conditions and requirements they can offer you. An important aspect to keep in mind is knowing for sure the final amount that we will end up paying for the mortgage.
Perhaps you do not like the product that any bank sells to you when you see that you will return almost twice as much as requested. In these cases it is better to discard this option and go for another evaluation, which are usually totally free.
Finally, the advice that we can give you is that the security when hiring such an important financial product is to know what you are hiring. If we think in the long term, we do not know in what conditions we will find ourselves or the amount of income that will be in the family nucleus, so the main thing is not to borrow too much and try to ask as little as possible.