The formalization of a housing loan for the purchase of a house is a very bureaucratic process. However, there are several myths surrounding this financial operation. If you are going to resort to a loan, find out what is true or false and which details you should pay special attention to.
Myth 1: The mortgage spread is the most relevant indicator for analyzing various proposals
When looking for a mortgage, many people focus on getting the lowest possible mortgage spread. However, although this is an indicator to consider, it is not the most relevant one since the mortgage spread is only one of the costs of the loan and does not portray the totality of charges that you will have with the credit for the purchase of the house.
When comparing mortgage loan offers with the same amount, term and repayment modality, two essential indicators should be analyzed: the MTIC and the APR.
These will tell you which is the best solution for your pocket, not the mortgage spread.
Total Amount Imputed to the Consumer (MTIC)
This indicator covers the total amount of the loan plus all other credit costs, such as interest, commissions, taxes and other charges.
Note that when you take out a variable rate mortgage, the total cost of the loan may differ depending on the performance of the indexer over the life of the contract. However, the MTIC is a relevant aspect when you contract the credit, since it will identify which of the proposals will be less expensive overall.
Annual Percentage Rate of Charge (APR)
The APR measures the cost of borrowing per year as a percentage of the amount borrowed. This rate already includes interest, commissions, expenses, taxes and insurance.
Thus, it should be noted that when comparing offers, the APR offers a much more global view than the mortgage credit spread.
Myth 2: The longer the loan term, the less you pay
It is true that the longer the mortgage term, the lower the monthly payment. However, this does not mean that the credit becomes less expensive.
On the contrary, the mortgage payment includes a portion of borrowed capital and another of interest, and the longer the mortgage term, the longer the period during which you will be paying interest.
So in the end you will be paying more for the same money.
In other words, the idealization that the longer the mortgage term is the better does not happen that way, and it is essential to make a considered decision on this issue by looking for a mortgage term that is as short as possible, as long as it makes it possible to pay the monthly instalment comfortably.
Myth 3: Opening a bank account to formalize a housing loan
Having an account with the lender where you intend to take out a credit is not compulsory, in theory. However, it is a condition required by most banks, which see mortgages as an anchor product that makes it possible to build customer loyalty and increase the probability of contracting other financial products. But this is not always the case.
Myth 4: To contract other products to save
In case you are looking for the best mortgage for your pocket, you must have already made a series of simulations in several banks. It is possible that they have suggested the contracting of other products, such as the domiciliation of the salary, insurance or credit cards, in exchange for a bonus in the home credit spread.
If you think that a lower home equity spread is equivalent to saving, you may be wrong. Contracting other products may involve more costs and may not make it worthwhile to contract them.
In this sense, the amount you save with the mortgage spread may end up being spent on other costs later. You must therefore analyze if the decrease in the home credit spread is really advantageous through the MTIC and the APR.
It should be noted that by agreeing to contract additional products to decrease the home credit spread you assume an additional commitment. This means that during the life of the loan you cannot cancel the products in question or you will see the contracted spread (cheaper) changing to the value of the base spread (more expensive).
Myth 5: I need a guarantor to resort to a credit
When using a mortgage to buy a house, certain guarantees will always be required to certify that, regardless of the financial situation, the bank will receive the money it lent. However, these guarantees do not always translate into guarantors.
The main guarantee that will be required is the mortgage on the property being purchased.
However, to increase the guarantees of payment and credit assignment certain banks may request guarantors. This way, if a bank puts as a condition the existence of a guarantor, don't assume that everyone will do the same.
Myth 6: Going to the bank to formalize a housing credit
The idea that, in order to apply for a mortgage loan, it is necessary to go to the counter of a bank branch and leave with numerous documents is outdated. Nowadays, all you need is a computer with Internet access.
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