Steps You Should Take Before Buying a House
After much thinking and deciding if it is better to rent or buy a house , you have already decided. You are going to buy a flat! It is a moment of nerves and joy. So that it is always and do not end up regretting there are a series of steps you must take before buying the house and a series of information that you must have clear.
Following Things to keep in mind when buying a house
Buying a house can be something as simple as finding an apartment and buying it. The problem with doing so is that it is easy for you to end up with a house that does not fill you and also paying much more for it. What to do before buying a house? What to check before buying an apartment? These are two common questions that raise many doubts.
Among the things to know before buying an apartment is its state of charges, that is, knowing if the house I am going to buy has debts or not, find out the general expenses that you will have to face and even possible spills. In the following points you will see the keys to consider when buying a flat.
What type of housing do you want?
In the market you will be able to find homes under construction through cooperatives, new homes already finished or in the final stretch of the construction process and second-hand homes. Each type of house has its advantages and disadvantages, as well as some home buying expenses that you should know.
In the case of opting for a new home without building the key is to succeed with the developer. Review his history and promotions in which he has participated. If you have time, it can be even interesting to go see some of the ones that have already finished and ask the neighbors for finishes and qualities.
The same also applies to new homes already built. In both cases you should know the costs of buying a new house in front of a second-hand one. When purchasing a new apartment you will have to pay 10% VAT on the purchase value. If the house is officially protected, that VAT will be only 4%.
The advantage of these homes is that there will be no reforms at some time, with the savings that entails. In addition, you enter a new community where all the neighbors start from scratch. To this we must add that in a floor under construction you can customize some elements during the work. On the contrary, in these cases the negotiation margin is usually narrower.
When buying a second-hand house you will not have to pay VAT, but the Property Transfer Tax or ITP. This tax depends on each autonomous community, although the average ranges between 6% and 8%.
Calculate here all the expenses associated with the purchase of your house
Before looking for a house: what is your budget to buy an apartment
One of the most common mistakes when looking for a flat to buy is to do it without knowing which house you can afford . Before opening Idealista, Fotocasa or you should know how much you can spend on your home. If you are like most Spaniards this reduces the crude question of how much money the bank is going to give you .
How much can you ask the mortgage bank
If something is clear the banks are what they are willing to risk in each operation. To begin with, the bank will rarely give you a mortgage above 85% of the value of the house, to which you will have to add additional expenses (in the next section we list them).
In addition, entities will also consider your expenses and income . With some exceptions, most will limit your borrowing capacity between 35% and 50% of your expenses, also depending on the value of the house. If you get a bargain it will be easier for them to get closer to the maximum.
In this sense, the most common formula to request more mortgage money is to extend the term of the loan. Before doing so be careful and make numbers because the total cost of the house can skyrocket.
What is paid when buying a house
As a general rule, the bank will finance up to 80% of the value of the house without taking into account the expenses of writing, notary, registration, appraisal … The average cost of these expenses added to the purchase of the house is between 10% and 15%.
The entrance of the apartment will be an important disbursement. Buying a house without a ticket is very complicated nowadays even if you get financing for buying the house. The reason is that the expenses for buying a house go beyond its price. In this article we list them all: how much does a mortgage cost, all the expenses that you should consider .
If you want to buy a house without money, there are also mortgages that cover 100% of the operation , but they are no longer as usual as years ago and require a strong bond. This is the only way to buy a house without savings. Of course, in doing so you will end up paying much more for it.
Before you go to look at home you should visit the bank to find out what mortgage they give you and how much money you have. It is easy for the entity to cover their backs by telling you that the loan will depend on the specific home. It is true that the house counts, and much, when granting the mortgage and the percentage to be financed. However, it is also that the bank can offer you a frame of reference on which to operate.
In this sense, do not limit yourself to a single entity. The best formula to achieve the cheapest mortgage is to have at least three entities with which to negotiate and press. You would be surprised to know how interested a bank may be in signing a mortgage with the appropriate client profile.
Later we give you the keys to negotiate the mortgage with the bank and what you should look at in the mortgage loan to avoid overpaying.
How much to spend at home
One thing is that the money lent to you by the bank and another good that you should take. It is important that you measure your financial capacity and the effort you will make to buy the house.
Financial capacity can be measured by the number of years it will take to pay the house with your income . The average in Spain is 7.3 years for a new house according to the Real Estate Appraisal Index of Appraisal Society that you can check here.
To this data is added the effort you are going to make to be an owner. The most common recommendation is that you should not allocate more than 40% of your income to pay for the house. In fact, the ideal is that this percentage is closer to 35%. The bank will also take this information into account when granting the mortgage or not.
And it is that what you pay for mortgages you will have to add the rest of the expenses of the house and those of the day to day. If something does not want the bank is that you had problems to pay and that is why it will seek to cover your back limiting the percentage of your income that will go to the mortgage.
If you are wondering with what salary I can buy a house , the answer is: with anyone. What happens is that your income will determine how much you can spend on housing. We leave you a tool to calculate the house that you could buy depending on the money that enters the house, your savings, etc.