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Credit-Loan Definition
Many times, this situation could have been avoided by signing the mortgage had contemplated cancel or modify some of the terms or conditions thereof, to be less stringent, more flexible and convenient way to pay.
It is a financial transaction in which leaves a lot of money for an agreed period of time.
In credit, the person who left you the money is who manages: withdraws login or returned depending on the needs you have. We may cancel all or part of the debt when we want but the deduction on interest payments.
Some Tips
Funding: The smallest possible
The greater amount of value of the home to ask for pay, the higher the level of debt. And speaking of long-term loans and floating rate, the risk of interest rate rises is patent. If you have a percentage of cash generated by security and a stable job, it is best to borrow as little as possible. Allocate the money to other investment product, with historically low interest rates, does not cover the cost of the interests of the mortgage debt contracted.
Deadline: Between 20 and 25 years
Interest will shoot the longer period. The most reasonable period ranges from 20 to 25 years. Is offering the most affordable fees and improved equity ratio and interest amortized. From the fourth century, the reductions obtained in the fee does not offset the number of years you have to be paying the loan becomes more expensive and also is much more sensitive to changes in interest rate.
Interest: Variable
The current scenario of low interest rates makes the variable rate is the recommended option because the fixed-rate loans are being marketed to very high interest rates. A good deal of the market with a variable rate today is Euribor +1 percent ( the rate in November recorded a rate of 2.044 per cent ) as would an initial rate of 3,044 percent, while the fixed rate round 5-6 percent. Keep in mind that there are also offers a variable rate of Euribor +3 percent. That's not a deal, that is not willing to give credit.
Index: Euribor, though...
The Euribor is the rate with a wider range of offers, but with a component - artificial mark the 20 leading European institutions, which causes large variations. MIBOR better reflects the real interest rate, would enjoy greater reliability, which are lending money market institutions Madrid. It could also be interesting public debt, but no offers. Same problem as would the IRS to five years, which has not yet entered into force.
Differential: Below 1 percent
Until recently it was common to find differential of 0.20 or 0.30 percent, but the norm is now spreads from 1.75, or 2 percent, even to quantities ordered 4 percent. Currently, less than 1 percent differential can be considered a good option and feasible. This point is completely negotiable ( tried other products with that entity is always the trump card of the client). This point must be taken into account because it is a long-term loan, period the rates will eventually rise.
Terms to avoid: Floor ' swaps ', etc..
Multiple. The most famous and the most damaging, ground clause. And second, which limits the prepayment. You also have to escape the ' swaps ' or swaps, the inability to lease the property while the loan is not paid, the obligation to have insurance policies that are not required by law or the so-called ' growing mortgage '. In many entities are hard to dodge and non-negotiable.
Prepayments: Yes
We must demand the ability to prepay debt no cost and prevent the commission of partial or total cancellation. This is used to modify the term ( shorten ) or share ( make it smaller ). What most interests. It will be the best investment. This option is basic and also a right. The legislation provides that the maximum fee for this item is 1 percent, but it is not only possible to include a 0 percent interest but is very common and a point where we have to insist on negotiations. If you are a good payer, the bank will rarely insist or recommend this option.
Payment in kind: No
It 's rare that an entity that accesses include payment in kind (the house as the only guarantee that accounts for the mortgage) without any compensation, either by increasing the rate applied, introducing other committees, giving a smaller amount of funding or only leading her most creditworthy customers. The Foundation does not have to necessarily be positive. For example, in many cases the value of the home can greatly exceed the outstanding loan. The economic loss can be tremendous. I mean, is not the panacea for the consumer because it always means a loss of all that has been paid in advance.
Life Insurance: No
It is very expensive and enormously expensive APR. It is much better to hire, if needed, a life insurance policy by other means, much cheaper. If you have hired other life policies, for example the work, there may be accessible to an even more affordable insurance. This situation applies to other products.
Default interest: Ignore
Be traded, but something very unusual. The usual, which can range from 15 percent to 29 percent, are very abusive. However, it is very unusual that banks agree to negotiate in this section considering who seeks a reduction in this sense includes the possibility of not being able to pay tomorrow. Perhaps the best thing for the consumer would be to ignore this clause and in a time where solvency conditions have tightened significantly.
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