How to buy a house?
It is one of the questions that arise when you want to establish an independent life, either alone or accompanied, since it is a great investment.
In this article we are going to discuss some tips on how to buy a home:
As is your ideal home?
The main thing when buying a house is that you feel comfortable and at ease during the time you are in the house. If you are buying with someone else, I recommend that you sit down and write down all your requirements and wishes for you in a house. For example: Parquet flooring, an open environment, how many rooms, how many bathrooms…
Thanks to the internet there are websites like hasury that you can filter the houses according to the area you want. You must have an open mind because probably the first house you see is not going to be the house of your dreams or maybe it is not in the conditions that you would like to have it, but you have to have a little vision. For example, you like the spaces of the house but not the color of the walls, you can change them without investing a lot of money.
How much would you buy your ideal home for?
Once you find a house to your liking, the next thing would be to offer a price for it, previously carrying out an appraisal of the property.
For this you have to take into account the value of the house, for example: recent sales of nearby properties, price per square meter (but if the house is not updated, without reforms, with outdated furniture, its value per square meter is low, and vice versa)… Then, it is time to negotiate with the real estate agent or the seller the final price of the purchase of the house.
Paying the deposit
After several negotiations and agreeing on the purchase price, a deposit must be made. This deposit is used as a sign that you are interested in the property, if the seller fails, they return the full deposit, but if the buyer fails, the seller keeps the deposit and you lose that money.
Signing of the deposit contract
The usual thing is that the buyer delivers 10% of the value of the home as a penitential deposit, It depends on what the parties involved in the sale agree.
If it is the buyer who breaks the contract, he will lose all the amounts delivered as penitential deposits, but if it is the seller who does not go ahead with the sale, he will return double the agreed amount as penitential deposits.
How much would the bank be willing to offer you the loan?
If you are going to be on the loan alone, your income and your credit will be taken into account, that is, if you have more income, it is enough for a more expensive house. This is why many couples enter the loan together, in this way they consider both incomes but the bad thing is that they only take into account the lowest credit between the two.
If you are going to qualify for the loan on your own, there are two important ratios to keep in mind:
Loan/Value: This means how much the house is worth and how much you owe on the house. This is why it helps a lot to put an initial payment, since depending on the amount of this initial payment, you will be charged more or less interest.
If, for example, the house is worth €250,000 and you only owe €200,000 after making your initial payment of €50,000, the bank sees that you already have something invested there and almost guarantees that you will not stop paying and this They trust you and can offer you a lower interest rate.
Another thing, if you put down less than 20% of the price of the house as an initial payment, they will make an extra charge called mortgage insurance. Until you have 20% of the value of the house invested, they are going to charge you that mortgage insurance.
Debts/Income: Imagine that you have a car payment that costs you €250 per month, and you are also considering a mortgage that would cost you around €700 per month. These would mean that your monthly debts would be about €950 per month, now the bank wants to see that your debts are below 35-40% of your income, so that they lend you that money, that is:
Debts/Income < 0.40
For the example you should enter at least one month:
Debts/0.40 = Income at €950/0.40 = €2,375 of minimum income per month.
Banks do not want your debts to be above 40%, because you could drown in debt and stop paying the house.
After all this, for all those who are thinking of buying a house, I have to say that if you are interested in investing in real estate, the value of houses generally tends to rise. Also, home upgrades generally increase the value of the home, which is what real estate investors do: buy cheap, renovate to increase its value, and finally sell.
I hope that this article has solved all or some of your doubts about how to buy a house, you can visit our New developments in Costa del Sol in case any of our promotions can give you that comfort and tranquility that you want in your home. If you know someone who wants to buy a house share it!
