When buying a house, many questions may arise due to lack of experience. One of the advantages is that if you are using a means of financing, many of those doubts will be answered by the bank or financial institution. But still, you can be making many mistakes. In the end, these can make you spend money or get a worse opportunity.
What you should avoid when buying a house
The real estate market of each country has its own peculiarities, sometimes it can be in recession and in others it can be advisable to buy a house. Whatever the current case, it will be an adventure to embark on the purchase of a property. These are the most common errors that are recommended to identify and avoid at all costs.
Very low down payment
Before making an important decision and start looking for places to live, it is recommended that you save as much as you can. From a third or fourth part of savings for the down payment will make the difference in the debt that you get to acquire. It is very difficult to collect the total cost of the property in cash, not impossible, but difficult. That is why people use mortgages and mortgage loans. The more money you have, the better you can get from the bank, the lower your debt and the quicker you’ll pay for the property.
When the banks make the offer of credit without deposit, that is to say, that it needs an initial payment neither low nor high, but only to pay the monthly payments, really this offer favors the bank. In the end, the deposit fee is included when raising interest rates.
On other occasions, they offer up to a second loan just to cover the deposit and thus be able to build their assets without having to worry about saving. But the big mistake in opting for this option is that your level of indebtedness can exceed your ability to pay.
They forget the 30% rule
In addition to the payment of a property, either with credit or loan, you must also be paying other responsibilities. You make the mistake of believing that it should be 30% of your total income and not 30% of what is left over after you have paid all of your responsibilities. Then the accounts do not give.
At the time of acquiring new debts, you must be realistic and know what your ability to pay.
Forget about the extra costs
In addition to getting a loan or credit to pay the deposit or capital of the property, there are other costs that many people forget. These expenses are taxes, commissions to intermediaries, notary fees, etc. Those, in turn, must be subtracted from the initial deposit.
When you forget those costs, they come as a surprise when the transaction is already advanced. Banks offer solutions like new loans that only become more interest.
Check that you have insurance coverage
Many people do not consider these details or even ask. But most of the time mortgage loans include insurance in case of problems such as fire or property damage.
Coverage may vary if you do not review or ask. People usually realize until some problem happens and realize that it is not covered in the insurance.
In the end, the best advice is to compare all the options of loans and mortgage loans that exist in the market. As well as saving as much money as possible so as not to have a large debt.