Thinking of your first home? If you are young, surely you have already spent time studying what is better, whether to buy or rent a flat. If finally, you have decided to buy your first home, we will tell you some recommendations that we hope will be very useful to you about mortgages if you are under 35 years old and you are facing this important step in your life.
You can discover more information about the steps to buy a house here.
What do I need to know about a mortgage?
A mortgage, according to the definition of the Bank of Spain, is a mortgage loan whose payment is guaranteed by the value of a property. That is to say, it is a credit but guaranteed by the house that is going to be bought.
It is a good time to review some concepts that will influence the mortgage that the bank will grant us:
Have 20% of the value of the home: once we have found the flat or house that we like, we have to have 20% of its value, since as a general rule financial institutions only grant 80% of their worth.
80% of the appraisal value or the sale price: as we have mentioned, banks usually grant 80% of the lower value between the appraisal price and the sale price of the property.
Dedicate a third (30%) of the income to the mortgage payment: usually, banks take into account that the mortgaged party will only dedicate around a third of their monthly income to the mortgage payment. For more information visit First time buyer UK.
What is a young mortgage?
Although we have talked about the general characteristics of mortgages, most banks adopt the conditions of their mortgage loans to the profile of young people, offering a product adapted to their needs.
Some of the characteristics of mortgages for young people are longer terms of the mortgage, which can reach 40 years.
Know the expenses when signing a mortgage
With the Mortgage Law of 2019, the commissions and expenses charged must respond to services actually provided or to expenses incurred and if there is an opening commission, it will accrue only once and will include all the study, processing, or granting expenses of the loan or other similar caused by the granting of the loan.
The legislation also marks who (bank or buyer) pays what expenses:
Expenses paid by the bank (lender):
The cost of notary fees. of the mortgage loan deed and those of the copies will be assumed by whoever requests them.
The costs of registering the guarantees in the property registry.
Expenses paid by the user (borrower):
Property appraisal expenses.
Notary fees for requesting a copy of the deed.
At Banister, they offer you a simulator to find out the costs of buying and selling variable mortgages. Very useful!
Help to buy a flat if you are young
We know that even if you have a job, being able to buy a flat when you are young is not easy. That is why there are public programs to facilitate this process. You can see all the current grants at this link.