Posts Tagged ‘mortgage’

Six Point to Consider When You Take Mortgage Loans

Before you take  mortgage loans, better if You consider about six point below.

1. How much will I get?

Amount of housing that is valued. This value is provided appraisal companies contracted personally or, as usual, by financial institutions themselves. The bank usually granted in respect loan of around 80% of the appraised value (sometimes granting up to 100% with other guarantees, as have the support of guarantors). From your income. Financial institutions tend to estimate the share monthly by the owner can borrow is between 30% and 35% of total net income.

2. What kind of mortgage lender provides you with your personal circumstances?

Variable rate mortgage or mixed. In this type of loan, the interest rate is reviewed annually or semiannually, so the monthly fee is set each year or semester to market trends, according to a certain benchmark.

So at the beginning will be subject to payment of interest initial six months or a year. After you pay more or less depending on the evolution of the index reference plus a differential between an unbeatable 0.4% or 1.25% for the worst deals. In this case, the loan term will always stand fixed monthly fees vary periodically.

Fixed rate mortgage in this case, the interest rate and monthly charges remain fixed throughout the lifetime of loan. Therefore, the total time is also unchanged.

3. What interest rate will apply to your loan lender?

Banks tend to apply for mortgage loans fixed interest greater than that for variable rate mortgages. As fewer and fewer entities that make loans fixed we focus on variable rate mortgages or mixed.

4. How long do I have to repay the loan?

The maturity or repayment of the loan ranges from 10 to 30 years.

Logically, the longer the repayment period the lower the monthly fee, but the greater the amount of interest you pay. So you have to find a period that does not involve you a monthly charge, as brief as possible.

Note that if the term exceeds 20 years, reduced the monthly fee is so small it probably will not offset the increased interest generated in a very long payback period.

5. What fees will I have to pay?

Arrangement fee: usually no more than 1%. For the purposes is practical as an increase in interest rate first year. Commission for early cancellation: if you want to cancel the loan, the commission does not exceed 1%. In the case of interest can be fixed at 3%. Accelerated depreciation charges for the loan depend on the amounts to be amortized and the period expired and the loan. Typically agree individual credit institutions.

6. What if the house is already mortgaged?

If buying your home is already mortgaged (quite common Second-hand housing), after you have choices: (1) staying with the mortgage as it is formed, which is called subrogation; (2) negotiate with your bank or a change in the conditions of the initial mortgage; (3) change entity, which also is called subrogation. In this case you must pay the cancellation fee to the bank or to withdraw the initial mortgage.