Getting a mortgage is relatively easy, as far as we have a minimum solvency, and if the valuation of the house that we are going to buy, is in line with the financing amount that we asked from the bank. As of here, everything perfect. But, we must not accept a mortgage at any price, must we?
As a minimum requirement for getting a mortgage nowadays, we need two things: enough savings and incomes. There are other factors that have to do with the bank policy and the existing economic context, but mainly it´s just these two.
Majority of banks are financing up to 80% either from the valuation or purchasing value of the house. Normally the lowest price of these two. Also, we should count for the expenditures related to the buying, which are over 10%. Meaning, we need 30% of the total amount for the conveyance operation.
On the other hand, the bank is going to make a risk analysis, taking into account the level of incomes and labour security. And of course, the leverage rate or total debts, depending if we have other loans (personal, vehicles, etc). In total, the mortgage fee shouldn´t be higher than 35% of the monthly incomes.
It is also important, that by the time to assess the offer, not only focussing on the interest rate, but also in other factors that are directly or indirectly going to make more expensive mortgage, both if it is a fixed or variable rate, the commissions and other linked products associated to that (insurances, pension plans, etc). Anyway, everything is negotiable before getting a mortgage, and the key is on analysing as a whole, previously making the decision and choosing a bank.
Our goal is to get the best mortgage deal. Therefore, we should act in a more delicate way, and of course, knowing how to negotiate. Sure, as in any negotiation, the key to achieve a good agreement is to measure between sides, balancing, and if possible, it is little in our favour. And as Sun Tzu said in his great book “Art of War”: “Security against defeat implies defensive tactics; ability to defeat the enemy means taking the offensive.”
Although, when we are about to negotiate with a financial entity, and once we are conscious about if we fulfil the minimum requirement of solvency; we should not put ourselves in their hands to receive the standard conditions -which are normally ones that you see in the typical propaganda at the entrance of the bank office, or even a massive email marketing campaign that they send to millions of clients without any financial study-. We must be more demanding, so they will have to make a personalized evaluation, for getting the best conditions according to our profile.
Nowadays there are lots of online mortgage comparators, like rastreator.com, but they are only search engines that feeds itself from standard offers of the financial entities. However, what really works -and in fact, it is one of the free services that from VIVEenGRANADA we offer to our clients- is make the same action, but suggesting a personalized proposal to each client, using some entities simultaneously.
As we can see in the picture above, there is a big difference between you (the client) that goes to a bank office with a scheduled appointment, asking for a mortgage offer; than if they are (bankers) that come to your house -or such as we do with our clients, inviting them to our own offices- with a scheduled appointment, with at least three entities simultaneously, they give their best offer. This way, it seems that it starts to get balanced. In this case you are the one that chooses the bank and not the opposite. Meaning, such as Sun Tzu said in his previous quote, we can change from defensive to offensive.