Investment Guide

How to negotiate a mortgage with a bank

Negotiate a mortgage with a bank It is one of the most important moments of your life. It means that you are about to acquire your first home and, doing so paying more or less interest can imply a good purchase below the market, in line with the market or a bad purchase. Let’s see how to do it.

Guide | Learn to negotiate a mortgage with a bank

Buying a home is an important decision and negotiating a good mortgage, too. It is not only about getting an acceptable sale price, but also a mortgage with good conditions. And even better if you take the best possible conditions From the market.

Tips to negotiate your mortgage and pay the minimum

1- Take a look at the offers of Internet banks

The first thing you have to do is use some kind of mortgage comparator and take a look at the interest rates that banks are offering. They are not always real because you can negotiate and get lower rates, but they can give you some clues. At least as background knowledge or starting point.

2- Go to several banks, big and small

Sometimes we tend to go to the bank of all our lives or to the big ones that we know because we believe that they will give us better conditions, but be careful, it is not always like that. Also visit small banksbecause you can get many surprises when you discover that the interest rate is more interesting.

These are the banks that offer you the best mortgages.

3- Ask for offers and negotiate

When you go to several banks, you will see that they make you proposals. always ask for them writtenbecause they will help you deal and get a lower interest rate. It is also important that you provide all your documentation (work life, income…) and do not put obstacles, so that everything flows more easily.

4- If you can pay it over 15 years, better than 30

The more years of the mortgage, the more interest is paid. Of course, today, taking into account salaries, the fee can become inaccessible if we put the mortgage at only 15 years. That is why it is rarely lower than 30 years. Unless due to age (normally, up to 75 years old) they only grant it to us for 10, 15 or 20 years.

5- Be careful with the ties

There are banks that offer a very attractive interest rate a priori but that put you in a series of ties to comply with, be it insurance payments, pension plans, etc. Keep in mind that all this involves an expense, so you must do accounts to see if it compensates you.

There are times when it is more worthwhile to negotiate separate insurance and pay a little more in fees. In the end, It’s about paying as little as possible in your entire package.. So now you know, let’s do the math!

6- Variable or fixed?

Are you conservative or daring? Despite the rise, currently the best option is still the fixed-rate mortgage. In this way, you will always pay the same.

7- Amortize everything you can or not, only if it’s worth it!

In the event that you have negotiated a very low interest rate, you may not be interested in repaying and get more return for your money by investing in another product financial or even in another home. Keep that in mind!

Is it easier to access a mortgage in Madrid?

Eye, it could be! The Community of Madrid has launched a plan called ‘My First Home’, with which access to housing is facilitated for young people under 35 years of age, who will be able to access a mortgage with 95% financing.

It is a measure that can change the lives of young people, given that contributing 20% ​​of a 200,000-euro (€40,000) home is not the same as having to contribute 5% (10,000 euros). Therefore, without a doubt, it is a measure that makes it easier for young people to access a home with minimal savings.

It is also a measure that would help lower the average age at which the first home is purchased in Spain, which is 41 years. Although it must also be borne in mind that interest rates do not stop rising.

The importance of saving

If you want to pay as little interest as possible, try to save as much as you can. If you can give more down payment, you will have to ask for less mortgage and, therefore, you can lower the year number or installments, as you wish. The ideal is to reduce the number of years.

Savings can help you pay much less for your home. In addition, you can also dedicate a portion of that savings to investments with high returns, which will give you a lot for your money. In such a way that it can compensate you more than even pay off the mortgage. It all depends on the interest rate, do calculations every year!

With this guide, negotiate a mortgage with a bank We hope it will be easier for you and help you get a good interest rate. Do you have any doubt left?

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