We can all have in mind to buy our own house or apartment, but is it the perfect time to buy? And if so, is it the best time to apply for a mortgage loan? In this note we will evaluate the aspects you should consider to request this type of loan.
The first aspect you should consider is job stability. Banks evaluate the payment capacity of those who request this type of credit, in the evaluation you must have a fixed monthly income. If you are a dependent worker, you must at least have worked a year for your current company.
The initial fee
Banks do not lend 100% of the value of the property you want to buy. Therefore, it is necessary that they have the initial quota of the property. In general, this amount should be 10% of the value of the apartment or house for sale, although it is recommended that you do not affect your economy so much, is that you have 20%. Keep in mind that the higher the money saved you have, the lower the monthly installments you will pay for the mortgage.
Even if you want to buy a house, you won’t be able to have a mortgage loan if you don’t have a credit history. Not only does it imply that you do not have debts, but that you have financial activity, be it the use of credit cards or minor loans.
Without a credit history, banks will have no idea of your payment behavior and will not be able to lend you. If you have a good credit history, you should evaluate your current debts, plus the monthly mortgage payment does not exceed 45% of your income, otherwise you will not be able to assume the responsibility of paying the borrowed.
The interest rate
One factor that you should take into account when requesting a loan of this type is the current interest rate. You can search online comparators to get an average. For example, last July was a good time to apply for mortgage loans since the interest rate was at its historical low of 7.28%.
Aspects that can lower the interest rate
The situation described in the previous point could happen again under certain conditions, for example, that there will again be a decrease in interest in the US or that there is greater competition for mortgage loans between financial institutions in the country.
How to know what term to request a mortgage loan?
If you have already discovered that it is the best time for you to ask for the mortgage loan you need, it is time for you to evaluate in what period it will be better for you to schedule the payment of your total debt. Here are some tips:
- Ideally, choose as little time as possible to pay your mortgage. Specialists recommend that it be between 15 to 20 years. But everything will depend on the monthly income of each family unit.
- Keep in mind that the more years you set the mortgage payment, the more interest you will pay at the end.
- The number of years to pay your mortgage will also vary from the financial institution to which you borrow. There are some that give this type of loans to be paid between 5 to 10 years, while others in up to 30 years.
- The minimum and maximum financing term will be determined by the bank based on your ability to pay, choose the shortest possible time within the range that they recommend to reduce interest.
Finally, we advise you to evaluate properties within the range of your income. That way the monthly fee will never exceed 45% of your monthly income, so you won’t drastically affect your economy.