Financing: the most attractive payday loan consolidation

If we talk about payday loan consolidation, the first thing that comes to your mind is GT payday loan consolidation company. But do you know how these products work?

Can I afford to finance a home?

Before looking at how different home financing products are, it is important that we analyze our economic situation to assess if we would be able to return a mortgage without problems. And is that to access these loans is not enough to have work and a salary, but we must show the bank that we are solvent. Let’s see what keys we have to take into account to know if we can afford the hiring of a mortgage loan:

  • Mortgage installments must not exceed 35% of our salary. This is the percentage that, according to the Bank of Spain, can be devoted as much to the payment of the financial debts, that is to say, of the monthly payments of a mortgage loan and of other credits.

  • We must have saved 35% of what the house will cost us. Real estate loans generally finance up to 80% of the value of the home to be acquired. As a result, we have to have the remaining 20% plus an additional 15% to pay the corresponding deeds (notarial and registration fees, taxes, etc.).

  • You also have to have a stable work situation. As is logical, banks lend their money to customers who have been working for a while, who earn a good salary and who have an indefinite contract.

A tool that can help us discover if we could pay a mortgage is the free simulator of HelpMyCash.com, which will show us the total and monthly price of a mortgage taking into account all its possible costs. To use this calculator we just have to click on the red button located inside the following box:

Types of mortgages for financing homes

If we want to request a loan to finance a home, we have to know that these products are classified into three different categories according to their interest rate. Thus, depending on our needs and our risk tolerance, it may be more convenient to contract one or another mortgage. These are the modalities currently marketed by banks:

  • A variable rate: in this case, the interest on the mortgage is a differential (a fixed value) plus the price of a reference index, which is usually the Euribor. Periodically, the bank reviews the records of this index and updates the applied rate, so the amount of the fees may change in each revision.

  • At fixed interest: fixed rate real estate loans have an interest that remains unchanged throughout the repayment period. Consequently, their quotas remain unchanged, unless the contract is modified in some way.

  • A mixed type: mortgages of this kind have a fixed interest at the beginning and variable at the end. Normally, the constant rate is applied during the first five to 20 years and, after that period, an interest referenced to the Euribor is applied.

Currently, variable mortgages are the cheapest, since the Euribor quotes in negative numbers. However, with a fixed-rate loan, we would be protected from a possible rise in this index, so the decision to opt for one or another modality will depend on our risk tolerance.

Other expenses associated with real estate loans

Applied interest is one of the aspects of which the price of house financing is composed, but not the only one. And is that mortgage loans usually include several expenses within your fine print; some compulsory and others that depend on the bank that markets them. This is the list of all the additional costs of the mortgages:

  • The commissions: they are charges that the banks can charge to carry out certain operations. The most common are opening (for the formalization of the contract), early repayment (advance capital), subrogation (move the mortgage to another bank) and novation (agree a change of conditions).

  • Linkage: normally, to finance a home at a good price you have to contract other bank products, such as insurance or credit cards. Some of these services have a cost that must be included in the final price of the mortgage.

  • The expenses of incorporation and sale: is what it costs to write both the mortgage loan and the new property of the property. As we have seen, they are equivalent to between 10% and 15% of the value of the house.

In general, in commercial banking communications, only the interest rate of the offer and its main advantages stand out. Therefore, if we want to know what the additional costs of a mortgage are, we will have to carefully read your pre-contractual information and the documentation that the bank will provide us after approving the transaction.

How to get the best mortgage for your house

Now that we know what to look for when looking for home financing, we can start to check the conditions of several mortgages to start the application and hiring process. Let’s see what procedure we can follow to find a good mortgage loan that meets our needs:

  1. Ask for financing from several banks. In this way, we will have more than one offer on the table and we can compare their conditions to see which one suits us. Before going to an entity, we can also use an online comparator to see the characteristics of various mortgage loans without leaving home.

  2. Start the application process. If the product of a bank convinces us, we will have to deliver several documents so that the analysis department of the entity will study the viability of the operation. If yes, we will make a firm offer.

  3. Request the binding offer. In this way, the bank will be obliged to keep the conditions offered for a certain period of time, which is usually at least 15 days. During this period, we can go to other entities to compare their mortgages with ours.

  4. Go to the notary before the day of signing. In the three days prior to the date of the contract, we can ask the notary to explain the contents of the contract for free.

  5. Sign the deed The last step is to formalize the constitution of the mortgage loan. Of course, before doing so, it is important that we read the writing to make sure nothing has been changed.