In this post we are going to know the 5 most common questions about home loans and their answers. There is a need among Mexicans to acquire a property; A home loan is the best option to buy a home without the need to be undercapitalized.
The acquisition of a property can become a bad decision for your personal finances, only if you DO NOT have a correct strategy to manage your mortgage credit.
In order for you to take full advantage of credit, it is necessary to know everything about a mortgage loan.
A mortgage loan is a loan offered by a financial institution, which allows you to acquire from a new or used house or apartment, to a land to build.
This type of mortgage credit, like any other contract, must be a formal and legally structured document with its respective payment clauses, agreed terms and agreed interest percentage.
The property remains as collateral for said loan; At the end of the terms and payments provided for in the housing loan contract, the Certificate of Freedom from Lien is obtained, and the mortgage is released, leaving the buyer as sole owner.
Currently is a good time to apply for a home loan, due to the current macroeconomic stability and the benefits that are currently offered, such as fixed monthly payments and current interest rates.
Take into account the following points to apply for home loans:
1. What are the types of interest rates on mortgage loans?
According to the applicable interest rates, there is the following classification:
- The variable rate: The interest percentage is free to go up or down each year, depending on the economic conditions of each year.
- The fixed rate: It does not change the scheduled interest from the beginning of the loan until its completion, it always respects the agreed rate from the beginning.
- The mixed rate: It is a combination of the variable rate and the fixed rate, these are combined depending on the agreements that are given and are established according to the interest and capacity of the applicant.
2. Can I apply for a home loan on my own house?
The answer is yes.
If you already have a home of your own, you can get a loan called: “home equity loan.” Home equity credit is a loan that you acquire by placing your home as collateral.
You can invest the loan to improve it, remodel it or for any other purpose that you require. In ION Financiera this type of credit is called: Liquidity Credit with Mortgage Guarantee.
If you already live in the house, which you will put as collateral for the loan, the amount granted can be up to 66% of the value of the home. If you do not live in the house, the amount they can grant you is up to 40%.
Regularly the term you have to pay this type of credit with a mortgage guarantee is between 1 and 10 years.
3. What are the terms to pay a Home Loan and how would the interest be?
Most terms are between 5 and 20 years. Depending on the term requested, the percentage of interest that is going to be provided on the loan goes.
The longer the term you choose, the more risk it is for the bank.
Depending on the selected term, if it is a longer term, the higher the interest to be paid. The lowest mortgage credit is the one with the shortest payment time.
After the established deadlines have expired and there is no debt, the Certificate of Freedom from Encumbrance is issued that will expose the legal situation of the property, that is, the solvency of the property.
4. Can I get 100% of the value of the house? How much money do I need to have?
You should know that in general, home loans do not cover 100% of the cost of the home.
You must have an initial amount that is a minimum percentage of the value of the home to use it as a down payment, this initial amount may vary depending on the case and the characteristics of each buyer.
Suppose you want a home and in the prequalifier you notice that you have 30% down payment. It means that you already have 30% of the value of the home to start the negotiation and that they will grant you the remaining 70% of the total value in the home loan.
You should also consider the notarial costs that we assume are 5% of the total value of the home, added in this example, for the purchase of the property you would need to have 35% of the total value of the home available.
You can contribute a greater amount as a down payment if you wish and if so, it will be more convenient for you and your finances since the amount of the financing will be less.
In this way, the sum of money that you will pay for interest on the home loan will also be less.
5. Would I have to pay any penalty for not being able to meet the payments established in the contract?
All contracts include a penalty clause for both parties in the event of non-compliance.
You must be very clear about the conditions within your home loan contract , since in case you are late in payments, the penalties that were set from the beginning in your contract will be exercised.
You also have to see if it is possible to advance monthly payments or prepay your credit.
For example, if you get a bonus, a salary increase or you made a large sale of your products, it is important to know if you can make capital payments so that your total debt decreases and you can get out of it earlier without charging a fine or surcharge.
Avoid requesting a credit so high that you cannot pay it or that it implies that you limit yourself too much in other important aspects of your life.
Remember that your new house or apartment will be your main asset, but there are other areas of your life that are also important and that will require you to allocate money.
If you know the details of your personal and family finances, it will be easier for you to run less risk of defaulting on the established payments.
Now that you have an answer to these main questions that arise when you want to obtain a home loan in Mexico, take them into account and decide the best according to your investment possibilities in a new property.
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