When embarking on the purchase of a home, do we know everything involved in making such a decision? Can we meet with surprises and expenses that we did not expect? Before making such an important decision it is best to be informed and take into account all those expenses associated to be able to calculate a real budget. Among these additional expenses are elements we often hear heard of as commissions, related products, insurance, interest rate or floor clause? But do we really know what they are?
Expenses and taxes
The first thing to think about is that banks grant up to 80% of the appraised value of the property that we want to acquire. The rest we have to pay as initial payment, to which we must add the expenses derived from the processing of the mortgage and the purchase of the house (commissions, taxes, etc.). Between notary expenses, taxes, and other efforts we can pay up to 10% more.
In addition, it is important to know that there are a series of procedures that must be paid when applying for a mortgage regardless of whether or not we are granted. For example, the appraisal is mandatory, which has a validity of 6 months. It is also necessary to ask for verification of ownership of the property and if it is free of charges such as unpaid taxes.
The 5 things to keep in mind before you apply for a mortgage The 5 things to keep in mind before you apply for a mortgage
The purchase of a home also generates taxes, and these vary greatly depending on factors. For example, what is paid for a new home is not the same as for a second-hand home. VAT is only paid when it is new and purchased directly from the developer (10% or 4% if it is an Official Protection Housing or VPO). If it is a used home then we will have to pay the Transfer Tax. It assumes between 5 and 8% of the price, depending on the autonomous community, if you are a large family, you can prove a handicap or if you are under 32, among other factors.
To complete the purchase must be signed before a notary and register both the mortgage and the deed of the house in the Registry. After that, it is mandatory to pay the Tax of Documented Legal Acts, which is between 0.1 and 1.5% of the total mortgage liability (that is, the sum of the total loan, plus expenses, interest, etc.) depending Of the conditions and the autonomous community. These procedures are usually entrusted to a manager. If we are interested in a VPO we are in luck, since they have a reduced price for this type of expenses.
Finally, we will usually have to pay the manager, who is responsible for the registration of the property and the tax settlement. This expense depends on the manager himself, so it is convenient to ask and compare different options. Generally, these services cost between $150 and 300.
Now that we have located the expenses that can appear and thus avoid surprises, we will inquire about different concepts of the product itself.
It is a document that makes it possible to assess and compare the energy efficiency of housing as an added factor for purchasing and / or rental decisions. In this certificate is specified by means of a scale that goes from A to G, the emission level of C0 2 in comparison with the dimensions of the building. From 2013, the homes for sale or rent in Spain must have this certificate.
There are special cases, such as the Triodes Mortgage, in which the interest rate is guided by the Euribor, but the percentage added (differential) is linked to the energy certification of the home. The more energy-efficient the property, the better conditions are obtained. The improvement of energy efficiency also entails great economic savings in domestic economies: the difference in expenditure on heating, cooling and hot water between a dwelling of about 100 m² of energy category A and another category G can be up to $2011.63 a year. Among the improvement recommendations to increase the energy efficiency of the building are measures as simple as improving the sealing of windows or installing awnings.
Normally when we ask for a mortgage we will have to contract different additional products. These products are usually the contracting of life or multi-risk insurance, credit cards or domicile payroll in the bank, among others. In this sense, we must assess the cost of each of these products that we are offered and that can sometimes make a mortgage that seems to have the best conditions a priori and we end up getting more expensive.
In short, when buying a home we not only have to take into account the amount of the loan and the installments to pay. It is very important to take into account all the other associated expenses that we are going to find ourselves and also to remember the energy certification and its implication in the care of the environment and also in the economic saving that can mean. Making a budget with all these data and including possible contingencies can help us a lot.