A roof. So simple, so far away. Housing is a primary asset (and a fundamental right) for any life project, but it is not within the reach of any pocket … unless finances expand the possibilities of that pocket, projecting it into the future. The mortgage, one of the most popular loans in our society, accompanies the subscriber for a good part of his life: it is convenient to know its ins and outs.
But wait. A mortgage now, with which you are falling? Diego Fernández Ortiz, responsible of Mortgages Santander Spain, argues its affirmative answer. On the one hand, there are reasons to change the nest: “As a result of the pandemic, many people have begun to value certain attributes of the houses, such as having more rooms and a multipurpose space, the garden …” On the other On the other hand, “the market moment is very good from the point of view of prices, historically low, both in fixed and variable rates.”
Fernández remembers that mortgages are basically divided into two modalities. “In the fixed line, the client contracts a loan with an interest rate that does not vary, with the consequent certainty about the load it assumes. By cons, in the variable, this rate is referenced to the Euribor, a public index indicative of the price of money; there is risk, but, in return, the initial price is lower” Furthermore, it is a relative risk, since” these indices tend to have little variation; in fact the Euribor is negative, and there are public forecasts that it will continue like this for at least another 10 years, “says Diego Fernández Ortiz.
In any case, The essential thing is that each person carefully assess their personal circumstances before embarking on the adventure.
According to Fernández, first you have to make sure that they are “the minimum requirements to access a mortgage loan, such as age, job stability or savings”. From there, begins “an administrative process that requires several documents, which must be accessible so that everything flows correctly. “In the corresponding folder, things such as personal income tax returns, contracts and other labor documentation, the earnest money, the last IBI …
A third step consists of calculating “how much the loan is going to amount to, depending on the home to which it is aspired and what can be contributed initially”. Here Fernández provides a simple rule of thumb. “Banks usually contribute 80% of the value of the house, so the client has to put the remaining 20% and an extra 10% in taxes and administrative expenses of the operation (registration, appraisal …)”.
At this point, there is only “evaluate different mortgage offers before making a decision”. At this time it is important “not just look at the interest rate, but analyze all the conditions.” At this point in the process we could also include the choice of the type of mortgage among those already explained, fixed and variable, but taking into account a third: the mixed one, which combines both, usually starting from fixed and changing to variable in about 10 years.
The most frequent error lurks along the way, according to Fernández. “Performing the calculations wrong. It is worth analyzing everything with a bank manager who, according to the new law on real estate credit contracting, must be trained and trained to explain all the conditions and terminologies of a contract of this kind” . Among them, the term “perhaps less intuitive: the APR, which groups together all the administrative expenses of the credit so that the client can compare offers from different entities in a homogeneous way”.
A especially hard load for young people, who often do not have enough savings. “Banks such as Santander and the Public Administration are looking for solutions; the Community of Madrid, for example, has recently announced a budget allocation of 12 million euros of guarantee so that next year the banks can lend an amount higher”, explains Fernández, who concludes by recalling that many entities are now working to offer 100% online mortgages, as is the case of Santander Bank, for example, that with your online mortgage, you can contract it in seven steps accompanied by complete virtual advice.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
