The reactivation of the Spanish economy, with a growth of the Gross Domestic Product (GDP) around 3%, is leading again to revitalize the real estate market. Families are more likely to sign their mortgages to finance their home purchase. And taking advantage of the fact that the European benchmark index, popularly known as Euribor, - to which most mortgages are linked - is at historic lows, standing at 0,51% at the end of the year.
Faced with a conjunctural scenario, there are not a few users who are open to subscribing a mortgage loan in the coming months. However, they should know that these banking products are no longer governed by the same contracting conditions as just a few years ago. They have changed, if not radically, if at least as to ask yourself how they would affect you in the process of financing that apartment that you liked so much, and you want it in property to establish yourself in it.
Mortgages are being developed under a lowering of the interests that apply to their claimants. But think that this trend will not last a lifetime, and even less with the repayment terms that these products present, and at any time your monthly payments may go up. In this sense, you should not forget that the European issuing bank can vary its monetary policy - as has happened in the United States - and cut the trend of cheaper money prices for all kinds of loans.
It must be remembered that interest rates in the euro zone are practically at zero, which is very beneficial to finance in the current circumstances. Of course, mortgages cost less, and as a consequence of this current trend, you will have to pay less expansive monthly installments. This scenario in practice will mean that you will save many euros a year, and to verify it with all its accuracy you will only have to make use of the calculator. Good news, without a doubt, for your personal interests, and that brings you closer to an imminent formalization of the product.
The offers offered by the banks
The mortgage loan landscape that you will have to face from now on has changed substantially compared to previous years. Not only in the deadlines they present, but also from the perspective of their design by financial institutions. Not surprisingly, its formalization will open you up to new demands, and especially to another way of relating to this product intended to finance the purchase of a home.
It will be very important that you take it into account at the precise moment of signing the contract, even taking advantage of certain concessions so that the conditions are more affordable to your wishes to subscribe this banking product. Going to offer bonuses when your relationship with the entity is greater, and in this way, save a minimum part of the expense that you will have to face when developing the real estate operation.
To help you prepare this task, in this article you will have all the keys to know more rigorously how these long-term financing channels are. As a consequence of this strategy, It will be easy for you to hire them, adapting them to your personal needs and the level of income you have at the moment. But the most important thing is that at least you will have a more concrete idea about the kind of product that you are going to find if you want to finance that house that you liked so much the other day.
Shorter deadlines
Hereditary mortgages, which contemplated excessively long repayment terms, are over, up to even 50 years. And that they could probably be passed down from parent to child with some ease. Currently it has been significantly reduced, generally they have a maximum limit in 30 years, being more difficult to exceed it. All this as a strategy developed by the banks themselves so that the level of indebtedness of Spanish families does not skyrocket, and in accordance with the recommendations of the Spanish issuing bank at the end of the last decade.
With this scenario, you can now amortize the operation more quickly, even the youngest, who have terms similar to those available to their parents. And if your idea was to pay the mortgage in 40 or 45 years, forget about them, since almost no bank sells these credits under these characteristics.
They do not finance the entire value of the apartment
Another approach to new mortgages is that it is already very difficult for them to finance 100% of the value of the property, as in the past. Now they reach 80 or 85% of the operation, but rarely more. As a consequence of this commercial trend, you will have no choice but to contribute an amount when you go to receive the keys to the new apartment. If you do not have savings for this purpose, you can start preparing them, because without this condition it will be more problematic for you to achieve the objectives.
And if what you want is a mortgage loan for the second home, the financing from the banks will decrease substantially. In this sense, it will be the younger clients who will be harmed in the variation of the contracting conditions. And where they should at least have the help of their parents.
Lower interest
As a result of the cheaper European benchmark, the interest you will have to assume in each operation has been drastically reduced. In the current offer that banks develop you can find mortgages with an interest linked to Euribor close to 1%, and that in many cases are being lowered to attract a greater number of clients, and revitalize the real estate sector.
To this is added the commercial strategy of canceling or lowering the possible commissions that these banking products may present (opening, study, partial or total amortization, etc.). Without forgetting the greater flexibility with which you are endowed. It is not in vain, it is increasingly common for you to choose between a fixed interest or another variable, depending on market conditions, and of course, the profile you present in your application.
Open to bonuses
But if the current mortgage offer must be distinguished by some characteristic, it is none other than by their openness to their interests. Through the bonuses provided by financial institutions, depending on the degree of connection you have with the bank. As you have more subscribed banking products (pension plans, insurance, investment funds, term deposits…) the spreads will gradually reduce. And until finally achieving a more competitive product.
There is also no lack of other aggressive strategies than to improve their conditions and that they impose that you have to contract with the entity the home insurance, and even other kinds of policies. Only then will you make you pay less money than initially contemplated in the offer. Although always with very narrow margins, without reaching very spectacular discounts.
With less demanding payroll
YesIn the event that you want to submit the application to be granted a mortgage loan, go preparing your payroll (or regular income) ahead. Unfortunately you will not have another solution to be supported. But the reduction in the salaries of Spanish workers has led the banks to soften their conditions.
You no longer need to present a very large monthly salary, but from 2.000 euros it will be enough for your application to be accepted. There are even some entities - very few at the moment - that lower margins to around 800 or 1.000 euros. And from which mileuristas can benefit.
Anyway, as you roster broader, the chances of detecting a mortgage will increase substantially. To the point of reaching very interesting offers, and from which you can obtain a series of additional advantages. Not in vainWhat the banks are after is for you to support the operation. Stable contracts having preference over those of an eventual nature. Precisely in the latter, the presence of a guarantor will be necessary to make your demand viable.
In any case, If not, you can present a permanent contract, it will be better to think about other alternatives. The financial institution will not be satisfied with your contributions and at the end of the process it will give a resounding negative. It will destroy your illusion, either to become independent, or on the contrary to get a better home than you inhabit at the moment.
Evolution of mortgage credit
The latest data provided by the National Institute of Statistics (INE) show that during the month of October 2015, the number of mortgages contracted in Spain rose significantly. Specifically, the average amount of mortgages registered in the property registers in October (from previously public deeds) was 139.395 euros, 7,3% higher than the same month in 2014. The number of mortgages constituted on housing is 19.195, 7,1% more than in October 2014. The average amount is 111.711 euros, an increase of 10,8%.
90,3% of mortgages constituted in October use a variable interest rate, compared to 9,7% of a fixed rate. Euribor is the most widely used reference rate in the constitution of variable interest mortgages, specifically in 92,0% of new contracts. The average interest rate at the beginning of the mortgage for all properties is 3,11%, while the average term is 21 years. The average interest rate, at the beginning, for mortgages constituted on homes is 3,30%, 8,2% lower than that registered in October 2014.