taking out housing credit is the solution for many Portuguese people to fulfill one of their dreams: buying a house. This is a considerable investment, which requires financial planning and a lot of research. It is important to collect as much information as possible, not only regarding the property, but also the existing forms of financing for the real estate market.
The process of choosing and purchasing a property seems to be becoming increasingly complex. It is normal for doubts to arise or for it to be difficult to decode and interpret the information presented.
If buying a house is in your plans in the near future, read our 5 tips and find out how to take out a home loan that is advantageous for you.
1. Analyze your finances
The first step to applying for a mortgage is to look at your portfolio. Taking a “financial photograph” will help you understand what budget is available. Buying a house involves a large investment, so it is important that you know where you stand in financial terms.
Avoid the “eyeball meter”: keep an honest record of your monthly expenses (fixed and variable) and categorize them. This way, you will be aware of the feasibility of supporting a monthly installmentof the housing loan and even possible increases. Furthermore, you will be able to identify the expenses that consume a large part of your income and, when possible, arrange them strategies to reduce them.
2. Compare home loan proposals
Knowing the different possibilities of housing credit is essential to have a basis for comparison and identify the most advantageous option for you.
Therefore, in addition to carrying out different simulations at various banking entities, pay attention to the European Standardized Information Sheet (FINE). There you will find the most important information regarding the banking proposal you are analyzing.
There are different parameters that you can compare, such as payment terms, spread, APR (global effective annual charge rate) or MTIC (total amount charged to the consumer). Each one will influence the total payable differently. Therefore, be careful: the most advantageous home loan is not always the one with the cheapest monthly installment.
We know that this comparison of proposals is complex and time-consuming. Therefore, at DECISIONS AND SOLUTIONS, we offer ourselves to be the bridge between the buyer and banking entities. We act as credit intermediaries, at no cost to you!
3. Decide between fixed rate and variable rate
Regarding the parameters to pay attention to, the interest rate is one of the most important, as it represents many euros at the end of the month (and at the end of the loan). It can be fixed or variable and it is essential to understand the differences between the two.
While the fixed interest rate remains constant throughout the financing term, the variable rate varies depending on the Euribor (the reference interest rate) and according to the established period (1 month, 3 months, 6 months or annual).
The fixed interest rate is usually higher than the variable one, but you are not subject to surprises in the monthly payment and exposure to risk is non-existent. However, with a variable interest rate, you will be able to save when the reference values are lower.
Therefore, the decision regarding the type of rate when taking out a mortgage loan can make all the difference to your portfolio.
5. Seek support from a credit intermediary
It is normal for the process of taking out a mortgage loan to raise doubts, which, for those without technical knowledge, can be frustrating and complex.
At DECISÕES E SOLUÇÕES, we support our clients at every stage: from analyzing their budget and knowing how much they can pay for a house to the property deed. The help of a credit intermediary makes the process easier and can be crucial to actually finding the most advantageous proposal.
Don’t be alone on this journey! We have the knowledge and experience necessary to provide you with the support you need. All you have to do is ask for help from one of our stores, spread across the country.
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Decisions and Solutions – Credit Intermediaries, Lda., registered with the Bank of Portugal, as a Linked Credit Intermediary, under no. 926, verifiable at https://www. bportugal.pt/intermediariocreditofar/decisoes-e-solucoes-intermediarios-de-credito-lda is a mediator registered with the ASF, since 29 September 2009, with the category of Insurance Agent, under no. 409311648/3, with authorization to Life and Non-Life Branches, available at www.asf.com.pt. The insurance intermediary does not assume risk coverage. Decisions and Solutions – Mediação Imobiliária, Lda., holder of AMI License No. 9300 issued by IMPIC, I.P.
