5 tips to consider before signing a mortgage: how to make the best decision.
The purchase of a home is, without a doubt, one of the most important decisions to be taken in life and that is why it is necessary to study and assess the various factors that affect the acquisition of a property. One of the most determined is the signing of a loan contract, so how do we recognize the conditions that are most favorable to us?
In today’s blog, we give you 5 tips to consider before signing a mortgage. Take note!
Compare before deciding.
To get started, you need to know the situation you are in and what your needs are. Then, and on this basis, it is advisable to draw up a list of the advantages and disadvantages of each of the offers, taking into account questions such as the payment facilities offered, your debt capacity, the concessions of delay or the guarantees required to get to the signature. Take your time and if you have any doubts, seek professional advice.
A matter of time …
Even though settling small installments may seem positive at first glance, the recommendation is to pay off the mortgage as quickly as possible, depending on your financing possibilities, of course. You will then save on accrued interest payments, and you will also benefit from more “leeway”, which will allow you to reduce the maturity when needed and extend the payment periods, if necessary.
You need to ask yourself if some of the benefits that banks offer you at the start of a mortgage payment, such as the ability to postpone deadlines, are really right for you or might be of benefit to you in the future.
How much money should I ask for?
As long as you can calmly face regulations or economic adversities, both during the term of your mortgage and afterward, it is not advisable to ask for more than 80% of the total cost. The monthly installments should also not exceed 50% of your income because otherwise, the effort could become too much for you.
Variable or fixed-rate loan?
While the variable rate mortgage is tied to fluctuations in the interest rate, which can potentially require us to assume maturity increases, the amount of the fixed-rate mortgage will always be equal, making it more ideal for people whose salary is not very high.
On the other hand, you should also know that if you take a fixed-rate mortgage, its usual maximum term is 15 to 20 years, after which it should be fully paid.
Negotiate your mortgage.
Even if the mortgage conditions are imposed by the banking establishment, if you detect clauses about which you have doubts or which do not clearly explain to you how much they could affect you in the future, negotiate them immediately to demand the necessary changes. It is important that everything is well stipulated in the contract!
If you’re planning to buy a home in 2018, find out! Read our post on the trends that will mark the real estate market as important changes are expected, such as, for example, the new Mortgage Law conditions which will be implemented in the first quarter of this year.