When you decide to buy your own house, you have many doubts and you may not know where to start or what process to follow. If you want to know what are the steps to apply for a mortgage, read on.
Launching to buy your own home is a decision that involves many things, including finding ways to finance it. This can be a long and expensive process if you are not clear about the steps you should take to speed up your search. Therefore, in this post we tell you what are the steps to apply for a mortgage.
Make numbers and analyze the situation
It is very important to perform an analysis exercise of our economic situation and know the additional expenses that can be generated when applying for a mortgage. Normally these expenses are variable and the amount will depend on the amount of the mortgage loan.
Another aspect to take into account is that the entities do not usually grant 100% of the housing, but rather they usually grant up to 80% of financing, so the rest of the value of the home must be able to face it With our savings. Although there are exceptions of entities that do finance the entire house if you buy one that is owned.
Once these aspects have been analyzed, and that we are clear that we have sufficient economic capacity to meet the additional expenses and the fees generated from the loan, we can now move on to the next step: search and compare.
Search and compare
There is a wide variety of mortgage loan offers, each with different conditions, either in the requirements and in the advantages it offers as in the economic conditions it has (the interest rate, the associated commissions, the benchmark …)
What we must do to search and compare, is to go to the different banks and request the different information leaflets in which the information and the basic aspects of the mortgage loans they offer are collected.
There are different key aspects that it is important that you know, because they can even serve you to negotiate with your bank:
The interest rate that applies
Return term they offer
The associated commissions
Related products (insurance, direct debit …)
This step is very important, since searching and comparing between the different loans is essential to find the one that best suits your situation and your needs. Once we have selected the entity with which we want to request a mortgage, we can go directly to the bank to arrange an appointment with the person responsible for these issues.
Or in case you are not sure which is the best option for you, you can always consider going to a financial advisor to help you with the process and expedite the procedures with the entity.
Wait for an answer
When we have presented all the corresponding documentation, we will have to wait for a response from the entity, to know if it is finally possible that they grant us the financing or on the other hand, if they deny it to us. Normally the average waiting time to get an answer from the bank is usually about 7 days, but it depends on each entity.
If your request is finally accepted, the bank will have to issue the binding offer. This includes the financial conditions offered by the entity and has a validity period of 10 days, a term offered to study the conditions and decide whether to accept or not. This document includes the following factors:
Amount and method of loan delivery
Amortization: number of installments to be paid, periodicity of payment, amount and date of payment.
Interest: nominal, reviews, benchmark …
Other expenses: appraisal, notary … etc
The entity is obliged to deliver this document to avoid possible confusion of a verbal negotiation, but you must bear in mind that in case of not accepting the offer, some entities charge a study fee for preparing it.
Sign before a notary
The last step to request a mortgage is to present the corresponding documentation to the notary to prepare the deed. The applicant has the right to choose the notary of their choice, although banks usually already have their own trustworthy.
Within 3 business days prior to signing, you can examine the deed in the notary’s office and ask any questions you have.
At the time of signing we can ask all our doubts to the agent of the entity with which we go to sign and the notary, since it is important to have all the points and clear aspects, because once the contract is signed there is no turning back.
In this signature will be present: the notary, the agent of the entity, the buyers, the sellers and in many occasions also, the management of the entity that is the one that will be in charge of all the corresponding procedures and procedures.
What steps and procedures will the agency handle?
It is responsible for removing the deeds from the notary, consolidating the appearance of the presentation in the Property Registry, paying the tax, the registration in the Property Registry and cancellations of previous charges.
Factors that can influence when applying for the mortgage:
There are a number of external factors that can influence when applying for the mortgage. We tell you what they are and how they can affect your request:
If it is first or second home: In the case that you are requesting financing for a second home, you should know that the conditions and requirements will be a bit more demanding and also that the entity will not finance as much amount as if it were a regular home. The percentage they finance for second homes is usually between 50% and 75%.
The money you have saved: The more savings, the greater the possibility that an entity will accept your request. By not financing 100% of the property, it is required that applicants can contribute a minimum of savings between 20% and 25% of the value of the house at least.
The address of the property: This point can influence the cost of your loan, since according to the Autonomous Community an interest value or other applies.
Now you know the steps you must follow to apply for a mortgage. It is important, above all, to be sure that you will be able to face the expenses and the fees, since, in case of non-payment you could lose your house, so you always have to bet on responsible financing.