What steps do I have to follow to sign a mortgage?

Are you looking for a mortgage? Well on this post i will tell you the mortgage process step by step. It is very important to know the basic concepts so that applying for a mortgage is easier.

Summary of the steps to follow to request a mortgage

If until now you have been undecided between renting or buying, but you have decided to sign a mortgage, you have to know that it is a long process that begins when we find the home we want to buy.

After requesting the necessary financing, the bank studies the client’s financial situation and gives approval to facilitate said financing.

The steps to follow to request a mortgage would be the following:

  1. Make sure that all the requirements to apply for the mortgage are met.
  2. See how much you are willing to pay.
  3. Do a search among the best mortgages on the market.
  4. Know what documentation the entity requires to request the mortgage.
  5. Wait for the bank to carry out the study and, if they agree to grant the mortgage, carefully read the documents sent by the client.

Do You meet the requirements to apply for a mortgage?

Once you have chosen the house, the first step to request a mortgage is to know if it meets the profile that the banks look for when granting this financing.

The entities need the user to be solvent, that is, they need the guarantee that they will be able to repay the loan without any type of mishap .This implies that he must have savings capacity, a stable job, etc.

How much are you willing to pay?

As I have commented in the previous point, even if you request financing for a property, the bank will normally only provide you 80% of its value , which means that you are responsible for the remaining 20%.

Likewise, to cover the costs of applying for a mortgage and purchasing a home, an additional 10% is needed, therefore, in the end the person will have to contribute 30% of the final price of their future home.

On the other hand, depending on whether the person acquires a fixed, variable or mixed mortgage , they may end up paying more or less for their home.

This is the difference between fixed, variable and mixed mortgage:

  • Fixed mortgage : the client pays the same monthly payment for all the years that the loan is paid.
  • Variable mortgage : a person normally pays a fixed fee the first year and, from the second, this varies depending on the reference index agreed with the bank (normally the Euribor).
  • Mixed mortgage: it is a combination of fixed and variable mortgage. During the first period it has a fixed fee and, later, it becomes dependent on the Euribor.

This means that, if during the period in which the mortgage is in force the Euribor is low , the client may end up paying less than if they had opted for a fixed or mixed mortgage and vice versa.

It will all depend on what a person wants to risk.

Another aspect to take into account are the commissions that the bank can include in your mortgage contract: subrogation, early repayment, floor clause… In many cases it can be negotiated that these are at zero cost, but the client is unaware of this.

On the other hand, to see how much they would have to pay approximately, the person can use online simulators.

Most of mortgage expense simulator , for example, takes into account the value of the future home, the savings contributed, the interest on the mortgage and the Euribor index. With this data, it shows the fee that a client with a fixed or variable mortgage may have to pay.

What documentation do you need to apply for a mortgage?

Once the person is clear about the money they need and the mortgage they are interested in, it is important that they collect all the documentation that the bank will require during the process of requesting a mortgage.

How long does the process take to apply for a mortgage?

Although there is no specific deadline  to know how long it will take to apply for a mortgage, it is a process that usually lasts a little more than a month. It must be taken into account that the client must select the home first, then consider the options they have to take out their mortgage, negotiate, deliver the documentation, study the mortgage contract…

Therefore, it is often advisable to go in search of experts to help us with all the procedures.

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