Acquiring the first home, changing your home, buying a car or choosing your children’s school are situations that we normally do not consider until the time comes to take the step. But what happens when we have to face making these decisions? We need to consider the following tips when facing homes for sale.
On many occasions we feel lost in the absence of information or, on the contrary, overwhelmed by the volume of documents and data that must be collected and understood. Having prior information is vital to help us make the path to our future home as simple as possible.
Aware of the headaches that can arise from buying a new property and the result of our experience; we have compiled all the steps of the purchase process that you have to take into account. We start?
1. Know your budget. As a starting point it is necessary to know the maximum amount that you can allocate to the purchase. The next question is: how can I calculate the “ideal monthly payment”? We recommend that the amount you allocate to this purchase does not exceed 35-40% of your stable monthly net income. In addition to this calculation, it is important to consider the money saved in case you have it.
2. Choose the payment method. Once the first phase is over, knowing with what budget you have accounts, it is time to decide how you pay for the new property. In this sense there are different options:
3. The payment in cash, supposes the total payment of the price agreed with the seller; Normally it is materialized through the delivery of a bank check in favor of the seller simultaneously with the signing of the deed of purchase.
4. The mortgage loan is a banking product that allows you to receive an amount of money for the acquisition of a property. All the loans normally have as a specific guarantee the acquired home itself, but you must know that in addition to the above, the loan is also answered with the present and future assets of the debtor. Depending on the age of the buyer and other circumstances, there are financial entities that offer repayment terms of up to 40 years. Normally, banks offer up to 80% of the value of the property, 20% must come from the savings of the buyer.
5. The mortgage subrogation consists of the change of ownership of the debtor in the mortgage, positioning the new debtor in the same rights and obligations as the previous one. It is very convenient that the creditor financial entity accept the subrogation prior to the purchase so you will have to request it in the same entity that the seller keeps the mortgage of the home you are going to acquire. Subrogation has the advantage of saving tax costs with respect to the constitution of a new mortgage, but it has the disadvantage that the amount, economic conditions and terms of return of the mortgage are already pre-set and may not adapt to your needs; in this case it is necessary to expose the creditor financial institution your needs to negotiate an extension of the loan amount, or to modify the economic conditions, or to increase the repayment terms, or all at the same time. At the time of formalizing the deed of purchase with subrogation, what is called a deed of novation of the loan will be instrumented in which the modifications to the original mortgage loan that have been agreed with the bank will be included.