Decor : How to choose the best mortgage for your home
After the impact that the economy has suffered due to the effects of the arrival of the pandemic in our country, Spaniards must have Special care when choosing a mortgage for the acquisition of a new home. Next we are going to share with you a series of keys that you should take into account if you want to choose the mortgage that best suits your personal needs.
What you should know before choosing a mortgage
First of all you have to know that mortgages are about very long term loans Through which large amounts of money are requested, always under a series of conditions that are sometimes difficult to understand. exist three different types of mortgage, among which you will have to choose one based on how they fit your preferences:
- Fixed Mortgage: it imposes an interest that requires the payment of a fixed installment during the life of the loan, thus facilitating better financial planning without incurring risks such as those caused by variations in the benchmark indices.
- Variable Mortgage: Unlike the previous one, the interest of these mortgages if it varies during the life of the same. Said interest is calculated by adding the reference index together with a spread (percentage of the loan fixed by each bank and which never changes). The Euribor, the benchmark index that is usually used in variable mortgages, changes every month. This means that the interest you are going to pay can increase or decrease, thus affecting the monthly payment for the mortgage loan.
- Mixed Mortgage: mortgage model that establishes a variable installment during part of the life of the loan. The rest of the time that said loan lasts, a fixed fee will be imposed, thus bringing the advantages of this payment model.
You should also consider the expenses and commissions that you are going to pay, in addition to those associated with the purchase of the home and the formalization of the mortgage loan. Among these additional costs we usually find the opening commissions, early amortization and novation commissions. That is why you will have to take into account not only the mortgage payments, but the additional expenses that it entails when determining whether it is worth choosing or not.
Finally, we recommend that you carry out a careful comparison work between the different mortgages offered by the corresponding financial institutions. Take into account the conditions of each one of them, the additional costs, the type of mortgage and the rest of the characteristics that influence your decision to, finally, to be able to make the best possible decision.