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How does a mortgage work? What is a deposit contract? Why do I have to go to the notary? When buying a house you have a thousand doubts, right? Don’t worry, because it’s totally logical. Getting a home, especially if you need a mortgage, is a cumbersome process full of paperwork that no one likes.
If you’re one of those young women who can afford to buy a home, congratulations on being in that small group! Today’s prices and salaries make it difficult, but in case you’ve been encouraged here we leave you some keys so that you have everything very clear before launching into the crazy world of buying a house.
What is the first thing I have to do?
It sounds obvious, but that’s how it is: finding the house of your dreams. Ok, maybe that is very ambitious, but at least you must locate the house that you want to buy. Once you do, you must refer the owner of the apartment (either directly or through the real estate agency) an offer for the property that he can accept or reject. Keep in mind that sometimes there are many owners (for example, in the event that the home is an inheritance), so on some occasions you will find that they are in favor of a reduction and on others the opposite.
After agreeing on a purchase price with the owners, you must decide if you pay it in full with savings or if you need a mortgage and communicate it to them. In the second case, the most common for small savers, you will sign a deposit contract with the owners that binds both of you to the commitment that the sale will take place.
Later you will have to Negotiate the mortgage with the bank. The logical thing is that you ask in several entities to see which one offers you the best price and opt for one. Then all you have to do is sign all the paperwork. In less than two months the house will be yours.
What is a deposit contract?
Wouldn’t it really bother you if, after negotiating the mortgage with the bank and getting your hopes up, the owners backed out and you were left homeless? Don’t worry because that’s what the deposit contract is for. It is, as its name suggests, a contract that binds the two parties so that they commit to the fact that the sale and purchase operation will be carried out.
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When signing it, you must make a transfer to the owners of the house with an amount that will be the reserve, which is usually 5% of the total price. This amount will be subtracted from the final cost. In this contract, conditions agreed by both parties must appear, such as the consequences of one of the two backing out. It is usual to consider that if the buyer backs out, lose the advance amount. While if he is the owner, he must pay the buyer double the reserve as compensation.
How can I afford a house?
The easy answer is by saving a lot, and not even then. If at your age you are lucky enough to have enough savings to pay for the house outright, you will have many fewer worries. But if you have a down payment and little else (like most small savers), you will need a mortgage, which will lengthen the process a bit.
If you are young, you have an acceptable salary and it is your first home, the banks will open their doors wide for you. Of course, this does not mean that the mortgage will be free. The bank will leave you a large amount of money (100,000, 120,000, 150,000 euros… it depends on how much the house costs) in exchange for you paying a percentage of interest. An amount that can be stable until you repay the last cent (fixed mortgage) or change every six months or every year (variable mortgage).
The choice between a fixed or variable mortgage is in your hands
The choice of one modality or another is in your hands and to make the decision you will have to take a bit of risk. In general, fixed mortgages usually have a higher interest rate than variable ones at the beginning. Of course, in the latter, the installments change year by year (or semester by semester, depending on your mortgage contract), so they can end up being more expensive. Or not.
Does the word Euribor ring a bell? It has become very popular in the media in recent months because it has skyrocketed this year. It is precisely this index that marks the variations in the cost of variable mortgages. When choosing, you must balance the cost of each option with the risk that the fees will rise or the peace of mind that they will be the same for the next thirty years. You will see.
What financial burdens does the house have?
Throughout the process, the owners must make it clear to you if the house has any type of charge. That is, if it is mortgaged, has debts to the community, is repossessed or rented… If there are these types of pending payments, you should know that you will assume them when you are the owner. Of course, you can agree with the owner to transfer the house to you without charges.
What expenses do I have to face?
Apart from the interest on the mortgage, when buying a house you will have to assume certain costs, such as the payment of the Property Transfer Tax, which is different depending on the autonomous community where you buy the house. Some even offer bonuses to young people who buy their first home. In addition, you will have to face the cost of the notary, the registry and the agency, but only that corresponding to the sale of the house. Because? Because those same expenses but referred to the signing of the mortgage are assumed by the bank.
What role does the notary have?
The notary will intervene in three very important moments if you need a mortgage or in one if you pay to tocateja. In the first case, he will be in charge of explaining the most vital issues of your mortgage to make sure you understand everything. At least one day later you will see him again to sign the mortgage deed. That same day you will also sign the sale, something that must also be done before a notary. If you pay for the house without a mortgage, you will only see him for this last step.
When do I get the keys?
At the same time that you sign the sale of the house and before a notary, so that everything is clear.