When buying a house, something that we must know before venturing into it are the different types of mortgages that the market offers us and how we have to ask for them in banks. It is very important that you know, before ordering them, what are the characteristics of these products, as well as the advantages and disadvantages of this type of mortgage.
You must bear in mind that one of the most important things you will do throughout your life, is to sign for a mortgage and you must know everything related to them. Besides, you should try to be better informed than you can about prices and appraisals in order not to have any future problems.
Given how complicated it is and the amount of things that must be taken into account in mortgages, we wanted to teach you to know everything you should know about them. the characteristics of each mortgage, as well as the offers that banks offer.
What mortgages are there according to their interest rate
Fixed-term mortgages
That type of mortgages are the most popular product in this market and it is likely to be one of the first to be offered so that your interest rate does not change over the years; This means that the same amount of money must be paid for as long as we have the mortgage. Since it has many facilities, it is a type of mortgage that more and more people are having each year. These types of fixed-interest loans are also much shorter over time, since they only have to be paid around 20 years, unlike normal mortgages that can be valid for up to 40.
Variable rate mortgage
The variable rate mortgage is another of the best known mortgages. In this case, the installments that must be paid on a monthly basis vary based on the mortgage reference. In Spain, the one that carries the most weight and by which most banks are guided is the Euribor.
If we take a look at the mortgage lists in this country, most mortgages correspond to this type of variable mortgage, being only a 7% fixed interest.
Mixed-rate mortgages
In mixed-rate mortgages, both interest rates must be known, since both are combined with each other. In this case, the fixed and variable interest rate makes the mortgage interest vary based on the Euribor reference or through a fixed interest that you can agree with the bank with which you will obtain the mortgage.
The different mortgages according to the type of installment they present
In addition to the interest rate, when it comes to Get a mortgage with your trusted bank, you must know the mortgages by the type of installment. These are the main mortgages according to the type of installment that should be known. You must think ahead when choosing the one that best suits you, in addition to assessing your current situation. If you are not sure what the type of mortgage payment that you must acquire, you can contact your trusted bank that will be able to recommend the best option.
Mortgage types and the advantages of each
Fixed installment mortgage
One of the most demanded mortgages by people who They seek to get a mortgage loan are fixed-installment mortgages In this type of mortgage, the monthly payments are based on a part of interest and another part of requested interest. When you start paying this type of mortgage, the interests are very high, however over time, the monthly amount to be paid goes down, based on the amortization of the principal.
After many years, the situation is completely reversed and people end up paying a very small amount, in addition to having most of the mortgage already paid.
Mortgages with armored installments
These Armored installment mortgages are another type of mortgage in high demand but a little more complicated to obtain. In this type of installment, it must be taken into account that the same amount of interest will always be paid, regardless of what happens to the interest externally or changes in the economy. However, it has a negative part and that is that based on changes in external interest, the amount of fees that must be paid if they change.
Mortgages with final installment
On the other hand, mortgages with a final installment are mortgages in which a part of the principal that is requested to pay in the last installment of the loan remains. This amount is given based on 30%. These types of mortgages are not so popular, since a large final payment is required in the last installment that, if we do not have that money, it can cause delinquency problems or you can even lose the house if you do not have the amount. established.
Increasing installment mortgages
In rural areas of India, families in charge of a blind minor frequently isolate and deprive him/her of the care and attention they provide to their other children; such situation becomes even more severe among lower-caste families, orphans and if the blind child is a girl. increasing installment mortgagesIt must be taken into account that the percentage grows as the years go by and also increases as interest rates change. It is a type of mortgage credit that people avoid since it does not have many benefits, but it does have many expenses.
Interest-only mortgages
This type of mortgages are very little known within Spain although if they are carried out by people who come from other countries to this. Here, every month only interest is paid and nothing is lowered from the total amount of the house; however, once each month is completed, the full principal amount must be paid or you can choose to sell the home in order to pay off that debt.
The different mortgages according to the type of property and personalized mortgages
There are also personalized mortgages for each type of person or mortgages on the type of property. These types of mortgages are very popular with people who have already tried to get a mortgage but have been refused.
Mortgages based on the type of property you want to buy. These types of mortgages are used to buy bank floors or official protection floors also called VPO. This type of mortgages is also used for the purchase of urban goods or rustic goods. They are used mainly in the case of mortgages to buy land or in order to acquire a first home when there are not many possibilities. In some cases, they can also be used to finance a second home.
Personalized mortgages
In the latter case and when we have been with a bank for a long time, we can ask a type of personalized mortgage in order to get the house of our dreams. These types of mortgages are given based on the profile of the person requesting it and it is tried that the monthly amount is the one that the client can pay and not the one that the bank stipulates.
It's a type of mortgage highly required by young people in order to be able to find the most advantageous quotas in the market and to be able to face the quotas even if the salary is low.
In this type of mortgages, you can also get mortgages for non-residents so that they can opt for a house without the conditions being too demanding.
Before buying a home
Now that you know what type of mortgage is best for you, you should also know some things before asking for it.
- Have some savings. Although banks normally finance 100% of mortgages, the procedures that are generated are not financed by these banks and must be considered in order not to lose money later.
- We must know the real price of the house that we are going to buy. It is important that you know everything related to the prices in the area you want to buy, as well as notary fees and some extras, in order to have a general idea of the amount you should ask for in your mortgage or to know if the price is too high. far from what you can really pay for. To know this 100% what you should do is assess the type of soil and the value of other houses in the area.
- Finally and in order to get a house as close as possible to our dreams, we must have a clean credit history, avoiding defaults. In addition, it is mandatory to have an amount of monthly income based on which the installments that must be paid month to month will be based.