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Everything you need to know before taking out a mortgage.

Know the particularities of mortgages

Real estate and sales law
Everything you need to know before taking out a mortgage.

For us it is vital that you know that the process of contracting a mortgage can be complex if you do not have enough information, at Audacia Lawyers we will give you all the information.

What types of mortgage exist?

The most widespread types of mortgage are fixed-rate and variable-rate. To choose one, a series of characteristics must be taken into account.

• Fixed-rate mortgage is one in which the interest remains the same throughout the loan, so you always pay the same installment . It is more recommended for those that last many years because it allows better control of what will be spent from the family budget.

Variable-rate mortgage in this case the monthly installment has a fixed part and another that will be updated with an official reference index, usually the Euribor. The disadvantage is the lack of knowledge of the evolution of the Euribor and hence the amount of the fee. It is recommended for clients with higher incomes who can handle these market "turbulences".

What requirements must I meet to apply for the mortgage?

The main one is that the person is between 18 and 75 years old and knows everything there is to know before contracting a mortgage.

What do banks take into account to guarantee solvency?

These are some aspects to take into account when granting a mortgage loan:

• Job stability.

• Income.

• Credit history.

• Personal situation.

How many years can I request the loan?

It would be best to find a balance that fits your income to pay off the loan as soon as possible. Therefore, if you have a high income, you can opt for a mortgage with a term of 10-15 years, but if, on the other hand, your income is low, the most convenient option is a 25-30 year mortgage.

What is the TIN and the TAE?

The TIN (Nominal Interest Rate) is the interest rate that the bank agrees as a concept of payment for lending the money, it indicates the percentage that the bank receives for giving the money.

The APR (Annual Equivalent Rate) is also an interest rate that includes all the costs of a financial product and is established as a percentage. This percentage will always be higher than the TIN, since it includes all the expenses derived from the operation.

What is the Euribor of a variable interest mortgage?

The Euribor is the interest rate at which credit institutions are willing to lend each other funds in euros. It really is not just an interest rate, but the average at which European banks lend money for a given term. This indicator is published every day, and depending on its rise or fall, the monthly installment of the mortgage contracted at variable interest evolves.

How much savings should I have to buy a home?

Normally the bank offers financing up to 80% of the total value of the home. This means for the buyer to have saved about 20%. On the other hand, you must have between 10% and 15% to cover additional expenses, such as notary, taxes and property registration, among others.

Now that you have all the information about the mortgage loan and know everything

what you need to know before contracting a mortgage do not hesitate to call your trusted lawyers for any matter related to the purchase-sale of properties, at Audacia Abogados we will be delighted to advise you.

Real estate and sales law

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