Posts Tagged ‘Mortgages’
The documentation that would exist for the negotiation of a mortgage loan consists of a prospectus, the binding offer and the loan agreement itself.
The booklet is a document that financial institutions are required to make available to stakeholders, which should be informed of data related to the loan and preparatory costs of the operation. You should also inquire about the following issues:
* Maximum Loan Amount.
Term of the loan.
* Frequency of payments (monthly, quarterly, etc ….)
* Interest rate. (Fixed or variable).
* Annual nominal interest rate, if the interest is fixed or the margin over the benchmark, if variable.
* Deadline for revision of interest rate.
* Arrangement fee.
* Prepayment Commission (partial and total).
* Taxes and fees (indication of the concepts.)
* Table of installments.
* Rates and fees of professionals involved in the operation
* Other expenses.
It is advisable to gather information from various banks, so to choose that loan that is most advantageous and best fits their economic conditions for it are concepts that should be taken into account, and must be clear:
1. The interest rate may be fixed or variable:
If you choose the fixed rate, it remains unchanged over the life of the loan, so if the evolution of the market tends to rise, the consumer is protected from this increase, but if you tend to fall, may not benefit thereof. These rates, banks usually do not hire them, because the average life of a loan is to vary between fifteen to thirty years, according to economic capacity of the debtor, so that signal a fixed rate involves taking a significant risk to both the entity and the consumer. To agree a fixed rate entities require the repayment of capital are not excessively long, with a trend to ten years.
If you choose a variable rate, the total amount that will have to repay the bank will vary depending on how you do the benchmark, used to determine the interest rate.
Noted that the usual practice, combining fixed and variable during the first year the rate is fixed and the rest of the life of the loan is variable.
2. There are reference rates more or less objective, the most common applied in a loan are the Mibor, which is an interest rate set by the Bank of Spain and the Euribor that establishes the European Banking Federation, which will gradually replace MIBOR.
3. The differential is an added benefit enjoyed by the bank on the reference interest rate (MIBOR, Euribor …), the application of the percentage differential is determined by the price of the bank loan that gives the best price for a loan spread is established by applying the entity. As for the review, it is normal to take values from year to year so that if the first value of the reference rate is dated April 1, the next review it will be with the type value reference on April 1 next year, many institutions apply the review every six months. It has allocated between 0.5% and 2% above the benchmark.
Where:
There are a wide variety of banks, credit institutions and intermediaries such as financial brokers, including multicurrency mortgage between their products.
Advice:
Neutral advice should be sought, ie an independent expert of the entity in which we have the mortgage, but should also consult with them. There are free counselors that do not require any commitment in advance and ask for a fee only if we end up accepting their offer. The solutions offered must be from banks or banks regulated by the Bank of Spain.
Risks:
Although not governed by the Euribor, Libor if not more stable or other reference, all currencies are unchanged in value in international markets, which can vary the debt. In addition, the mortgage can not be subrogated multicurrency would have to cancel, which in case of an urgent sale would prevent the best time to take advantage of the currency.
In times of crisis, all solutions look good if they promise a reduction in mortgage cuotamensual. Many mortgage-burdened by their high proportion, is now interested in the multicurrency mortgage , a product which, though it has its advantages, is not risk free. The idea is to build multi-mortgage interest rates lower than other currencies, which offers stability, apparently, more guarantees, with different benchmarks to Euribor, as LIBOR, for example. The immediate consequence is a lowering of the loans and a lower monthly rate.
Each coin has its moment, and choose a more stable currency like the Swiss franc benefit us long term, because Although its initial focus is more, assume less risks.In the event that we have chosen currency value change we can find the pleasant surprise that the monthly fee is reduced significantly. But it can also happen: that our debt has increased. Therefore, experts agree that signing a multicurrency mortgage is not a solution suitable for families living in an come nóminay just to make ends meet. Before deciding on one of these loans must be sure you understand its operation.
Given the current financial situation, risk esmayor, and would require a constant monitoring of the stock market fluctuation and to take adequate performance to mortgage.
Choose between providing personal or real guarantees to support a mortgage can avoid surprises when to sell a property.
During the last decade has seen a boom in housing sales. The mortgage has been, in most cases, the instrument used for financing the purchase of a property and, in many of these situations, buyers need a financial support guaranteeing payment of all and each of the shares of mortgage credit.
The figure of the guarantor becomes very important and it became almost imperative for young people, workers with low salaries, mortgage applicants in excess of 80% of the valuation of the floor or people without steady work. Many of those who, in turn, signed as guarantors of their family or friends are now wondering if they can offer to sell their property or whether, on the contrary, their status as guarantors of a loan of not holding them from freely of their heritage. The choice between providing personal or real guarantees to support a mortgage may be the key to making a property sale.
Personal guarantee
Often the figure is often confused with that of the guarantor “no mortgager debtor, so it is important to differentiate the two terms and know what each means before making a decision to support a mortgage.