Advice on buying a house

“It is not that this measure will have a great impact on the economies of the region, especially in the southern economies where credit is not flowing due to the deleveraging process that is taking place in these economies and the weak demand for solvent credit, but it would send a clear message from the European monetary authority that it is willing to support the economic recovery and that it rejects the immobility of which it is accused,” says Juan J. Fernández-Figares, director of the Analysis Department at Link Securities.

The monetary agency has reduced the interest it asks from banks in exchange for financing them. By lowering this cost, in theory the loans that banks then grant to households and companies will be cheaper. This would in turn have an impact on consumption and the room for maneuver of companies.

However, inflation in the eurozone stood at 1.2% in April, while the economy is facing a recession that has even affected Germany’s recovery. The ECB therefore had room to lower interest rates.

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If you are looking for a new home and want to buy it with a loan, you have surely wondered what documentation you need to apply for a mortgage. It is one of the first issues to take into account and that you should plan carefully to avoid surprises or setbacks. Don’t worry because in this post we share with you everything you need to know.

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Remember that when you plan to buy a house with a mortgage loan the bank will study your financial profile, analyzing the risk involved in lending you the money, before making a decision. Therefore, it will ask you for a series of documents depending on your employment situation.

Requirements for financing a house

The first reference to be taken into account is 30%. As the entities do not usually grant more than 80% of the appraisal in the mortgage, the user has to provide a saving for the remaining 20% as a down payment. Another 10% goes to expenses and associated taxes. Thus, for a house of 150,000 euros we would be talking about 45,000 euros, which rises to 90,000 in houses of 300,000.

The fixed rate pays off in the long term, as it eliminates the uncertainty of possible increases, but saving something later covers unforeseen events. Because in addition to good savings, another magic figure is 35%. “Most people don’t really know what their debt capacity is and what housing they can afford,” warns Trioteca. This 35% is the income ceiling that should be dedicated to the payment of installments. Exceeding it can put the family economy at risk. Or also generate a problem if you lose your job, as happened in the past crisis when many found themselves with an immense quota for oversized loans. “It is advisable that the mortgage should not exceed 30% of our gross monthly income, so that we can meet other expenses and also have the capacity to save,” says Cátia Alves, director of sustainability and CSR at Unión de Créditos Inmobiliarios (UCI).

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How to buy my first house

Due to the infrequent availability of savings to face the bulk of down payments to buy an apartment, this crucial question arises about whether or not to ask for a personal loan for the down payment of the mortgage.

How to face the payment of the down payment of a mortgage? The eternal doubt that arises to the potential buyers of, generally, their first house, whose initial expense supposes an important disbursement that the majority of pockets are incapable of facing.

This leads to the current vicious circle for most young people. They cannot buy because they have no savings and are therefore forced to rent, but this is expensive and prevents them from saving. Credit is no longer flowing as fast as it did in 2008, before the financial crisis, and banks are tightening lending conditions. You can get more information by reading the article on these are the requirements to apply for a mortgage.

That is why there are many who are thinking of buying a home but, to do so, previously request a loan to be able to pay the down payment. But, up to what point is it advisable to carry out this practice? The reasons for doing so or not will be explained below.