Did you make the decision to buy a house? Congratulations! Buying a property is a dream that many people have. However, the high cost causes mortgage credit to be a very popular financing option. If this is your case, I recommend you take the time to familiarize yourself with the concepts to choose the product that suits you best.
What is a mortgage?
Also known as a home loan, it is a long-term loan made by a financial institution, be it a bank or a Multiple Object Financial Society, to buy a house or an apartment. Credit support is the property itself; Therefore, if you stop paying, the mortgagee is entitled to demand payment before the law or promote the forced sale of the property to recover the credit.
That’s right, taking out a loan that has a good for collateral, such as the mortgage loan, implies that in case of missing monthly payments, you run the risk of losing the property. Therefore, it is very important to measure the commitment that is acquired and have the necessary information to choose the product that best suits our economic conditions.
To help you choose the best credit for you, I will give you the following recommendations:
Use a credit simulator
A first step to be safe is to use the online mortgage credit simulator offered by the National Commission for the Protection and Defense of Financial Service Users. On the website of each bank you will also find a similar program with important details that can be useful if you are already an account holder.
This tool tells you what each bank charges for socioeconomic study, appraisal, down payment, notarial expenses, damage insurance, life insurance or administration commission. Depending on the amount of credit you request, the simulator will pay the monthly payment. This first outline of expenses will help you identify if it exceeds your borrowing capacity.
Consider your age and income
The minimum age required to contract a mortgage loan is 18 years and the maximum age is 64 years 11 months. The calculation is based on the monthly net income, on the value of the property and if the person has support or subsidy from a national housing agency. In the first case, the benefit is granted to the person who works in a government institution. In the second case, the person works on the private initiative and is entitled to a housing sub-account and the amount of financing will be greater.
Mortgages for young people offer, as a general rule, more advantageous conditions. In some cases, financial institutions cost up to 100 percent, while mortgages for people over 40 are up to 80 percent, since it follows that the user has savings to buy the property.
See your credit history
Your behavior as a paid payer in previous and current credits such as credit cards, auto financing, telephony and department stores will determine if you are a candidate for a mortgage loan.
To know your rating you can check your special report and score in the Bureau or other Credit Information Society (SIC). Consider that, if you have a positive behavior you will be an attractive client for financial institutions, so it will be easier for you to approve the credit. If your debts are currently in arrears, it is very likely that you will not be rejected.
Go to the notary
Before signing the contract of sale, consult a notary. The idea is that the latter review the documents of the property and give legal advice to the parties, since both the sale of the property and the mortgage credit will be recorded in the same deed.
It is your right to choose the notary, but if you do not have it, the financial institution can suggest one. He will be responsible for calculating and withholding local and federal taxes for the purchase of the property, so you must pay the corresponding fees and taxes. The other expenses are paid in the financial institution once you have signed the contract of sale.
Consider interest payment
Along with the mortgage loan you must pay interest; that is, the price of the money you obtained as a loan. If you are punctual with your monthly payments, interest decreases over time. Currently, financial institutions reward satisfied customers and offer facilities to end up paying earlier than expected.
In all the mortgage loans, a small part of the original capital you hired is paid month by month and the rest are interest. Such payment is called capital amortization and means that each time the debt is less than the previous month. For this reason, interest is always calculated on the unpaid balance, that is, on what you have not covered from the debt.
Compare interest rates
Today you find fixed rates from 9.20% and some financial institutions do not charge you commissions for opening or research expenses. Others reimburse you for the appraisal or finance your deed expenses. But, to know who gives this type of facilities it is necessary that you dedicate time to look for the mortgage loan that best suits you.
Don’t forget the insurance
Until the payment of the entire debt is finished, the house will remain mortgaged in favor of the bank. This entails, by law, the obligation to contract coverage against the damages that the property may suffer and for the life of the debtor, that is, a home and life insurance.
Consult a real estate advisor
While you can acquire housing through free real estate portals, our recommendation is that you do so accompanied by a certified real estate professional. In this way you will have legal certainty about the property and the security that it is free of encumbrance and has no structural damage to its construction.
Improve your interest rate
If you already have a mortgage loan and are looking to improve the interest rate, you have the option of carrying your current financing to another bank and / or having liquidity from your property.
On the other hand, if you do not feel satisfied with the service offered by the financial institution, it is worth reviewing other options, especially if you have been a punctual payer. Today the ranges of mortgage interest rates range from 9.20% fixed annual, with terms of between five and 20 years depending on the client profile.
Although the income market is increasing, remember that buying a property can be an investment that will increase its value over time. Therefore, nothing better than starting with the right foot and looking for the right conditions for your pocket.fe