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August 4, 2021
Buying a house is said easy, unless you have the total liquidity of the property value of your interest, you must support yourself with the best mortgage credit to cover the expense and be able to pay it in a longer period of time.
Owning a home is a goal that many want to achieve in their adult lives to create wealth and have a sense of belonging.
According to a 2019 study by the National Autonomous University of Mexico (UNAM) and Citibanamex, 47% of young Mexicans seek to buy a house in the medium term.
But how do you choose the best mortgage credit option for you?
Before you start looking and buying options, it is important that you know the current state of your finances.
You must define how much you can give down, considering that many institutions do not give more than 70 or 90 percent of the total value of the property you want to buy.
Get ready and check if you have enough to cover the rest of that in the down payment, and also make sure you have enough to cover the additional expenses that a purchase entails.
This includes insurance, deed, Notary Public, purchase taxes, among others.
It is also important that you know your monthly financial status.
That is, how much net income you have per month and how much you spend.
With this, you can calculate what is the maximum amount you can pay each month.
Remember that it is recommended that your mortgage payment is not greater than 30% of your income so that you can control the debt and settle within the established term that you contract with your credit.
Knowing your finances, you will be able to define your needs within a realistic plane.
What are you looking for in the house of your dreams? Estimate the number of rooms, if you need a garden or patio, if you are looking for an apartment or house, with what facilities, etc.
In addition, you should consider location, infrastructure, proximity to points of interest, among others.
With this, you can establish a budget range according to your finances that you are willing to invest, and you can begin the search for real estate options within this budget.
You may think that you want a totally new house, but you will discover that a semi-new house that is for resale, meets your needs within the budget you have.
But also consider that a house that is not new, may need other maintenance, repair or improvement expenses that you should consider in your expenses outside of credit.
Now, start the search for the best credit for you.
Knowing your finances, having a budget and knowing the needs you have and what you are willing to sacrifice, you can approach financial institutions to find out what credits they have available to you.
Don’t marry the first option that comes your way. Do your due diligence and study the clauses, advantages and disadvantages of credits with different financial institutions.
Consider that banks usually handle maximum terms of 20 years, but they can grant you a limitation of up to 5 or 10 years, depending on your age, financial status, and status of your credit history.
The Infonavit (Institute of the National Housing Fund for Workers), grants terms of up to 35 years.
But remember that the longer the term, the higher the interest you end up paying, and therefore, the higher your debt.
Also consider that the shorter the term, the higher the monthly payment, depending on the amount of the credit, but the lower the total amount you end up paying including interest.
Interest rates vary from institution to institution, however, for bank mortgages, on average it is about 10 percent.
If you use your Infonavit credit, consider a rate of 12 percent.
But it is not only about the percentage of the rate, if not the type of rate that they offer you.
There are fixed rates that remain the same throughout the credit period, which are the most recommended.
Variable rates are riskier, as they depend on the volatility of the country’s economic status and there may be a severe increase in them at any time.
Each financial institution has variables that you will have to buy, along with everything else, to decide which one is best for you.
Check things like commission for opening, for administration, penalty of advance payments, option to make payments to capital, among others.
Fine print can hide benefits like prizes and rewards for paying on time.
This can range from exempt from a monthly payment, interest rate reduction, among others, which can reduce the total cost of your credit.
But here you will also find the conditions, terms and obligations that you agree to when signing the contract.
It is important that you know what your rights and obligations are within the established period.
There are many other variants that you should consider, such as whether the insurance is included and financed, or you will have to pay annually in a single installment.
There are certain periods in which banks offer benefits such as eliminating the commission for opening.
It is important that you research and talk with your executive to know what benefits it has that you can take advantage of to save.
Finally, check the requirements that are requested of you to open a line of credit.
Most financial institutions ask you the same (verifiable salary, credit history, initial capital, identification, proof of address, among others); but there may be variations and it is important that you know to decide which one suits you.
At the end of it all, it’s about doing your due diligence and knowing your rights, obligations and financial situation before making the leap to this commitment.