What are the three costs that make up a mortgage payment?

What are the three costs that make up a mortgage payment?

Mortgage expenses 2021

When applying for a mortgage loan to buy a house or a second home, you will have to consider some expenses and taxes that, inevitably, you will have to face at the moment of formalizing the operation.

Before going into detail, we want to explain the differences between the costs of buying and selling a home and the costs of formalizing a mortgage, since some must be assumed by the owner and others by the bank.

In this section we will talk about the expenses involved in the purchase of a house, regardless of whether you need to ask for a mortgage loan or not. They are the expenses of notary, expenses of the registry of the property, taxes linked to the purchase-sale, tax of Documented Legal Acts and the expenses gestoría.

Notary fees are one of the expenses when buying a house, whether new or used. This expense, also known as notary fees, is regulated by the State, which means that, regardless of the notary’s office chosen, the fees for this type of service will always be the same.

How much are the costs of a mortgage

It is normal to have doubts when asking for a mortgage. You will have to contribute initially 20% of the value of the house. And between 12% and 15% of the value of the property to pay the VAT or ITP and the rest of the expenses associated with the sale.

Read more  How many months do you pay rates?

You can apply for the mortgage online or from your branch. First, simulate the monthly payment you will pay and then start the form to request the mortgage study. We will need you to provide us with some documents in order to analyze your case and approve the viability.

You can choose between two types of installment: normal installment or subsidized installment, with which you will be able to subsidize the interest rate up to 1.00 % depending on the products that you decide to contract and that you maintain during the whole life of the loan.

Once you have sent us your mortgage application, we will need you to send us a series of documents to carry out the evaluation. We recommend that you send the documentation as soon as possible so that we can give you an early response.

Mortgage expenses in Colombia

The appraisal is an obligatory procedure to be able to ask for a mortgage, although the client can choose with which company to do it. It serves for the bank to know the value of the house, and, therefore, how much it can lend you. Its cost is not limited by law, and usually ranges between 200 and 500 euros.

The contracting of a mortgage is subject to the payment of a tax: the Impuesto de Actos Jurídicos Documentados, better known as the mortgage tax. The amount of this tax is set by each Autonomous Community, although it ranges between 0.5% and 1.5% of the mortgage liability (which is equivalent to the sum of the capital loaned by the bank, interest and other expenses).

Read more  Is Spark Energy pay as you go?

Nowadays, almost all the entities give a bonus on the price of their mortgages if the client contracts some extra products and services: that is to say, the interest will be lower if you direct deposit your salary or contract insurance, cards or pension plans, or other products. However, although this may be convenient, your bank can never force you to take out several insurance policies (or other products) in order to grant you the mortgage.

Mortgage Payment What is a down payment?

What is a down payment? You pay a percentage of the total cost of the home up front and the mortgage loan makes up the difference. The amount of the down payment can affect your loan options.

How does the down payment affect my mortgage amount? A 20% down payment on a $250,000 home would be $50,000, and the mortgage loan would be $200,000. Try our custom mortgage interest rate tool below for more specific loan scenarios.

How much money do I need to put down? Some mortgage programs accept a down payment as low as 3% or require no down payment. You may also be eligible for grants or credits that are available to homebuyers in your community.

Why save for a higher down payment? You don’t need a large down payment to buy a home. However, if you pay more up front, you may pay less interest overall, lower your monthly payment and avoid having to pay mortgage insurance.

Read more  How much does RAC call out cost?