Are you looking for a house and need bank financing? Do you have several mortgage loan options but don’t know how to choose? In this article, we provide key tips for selecting the mortgage loan that best suits your needs.
Choose the Bank
Choosing a mortgage loan is essentially choosing a bank to work with for several years, as this is an anchor product. In fact, this is one of the reasons banks try to increase their market share in mortgage lending – they know that clients will contract many other products and services, generating important revenue for the bank.
Since the mortgage is an anchor product, selecting the bank is just as important, if not more, than choosing the mortgage itself. Therefore, you should look for a solid bank with excellent customer service and a competitive price for the products that matter most to you.
Compare Different Mortgage Loan Offers
Having established that choosing the right bank is crucial, it’s equally important to evaluate different mortgage proposals. Unfortunately, we are often tempted to focus only on the spread, which is the direct margin the bank has with our contract. However, the spread hides many other costs that should be considered. Therefore, when comparing different mortgage offers, be sure to pay attention to the following:
- APR (Annual Percentage Rate) – This is the rate that takes into account all costs associated with the contract. It includes the interest rate, insurance costs, fees, and other “hidden” costs. The APR helps uncover these costs and allows you to compare different alternatives.
- MTIC (Total Amount Payable by the Client) – This figure converts the APR into euros, telling you how much you will pay in total over the life of the loan, assuming no changes in interest rates or fees.
- Term – Different banks offer different maximum loan terms, which can be good or bad depending on your circumstances. As we know, a longer term means more time to repay the bank, resulting in lower monthly payments but a higher total amount of interest paid.
- Loan-to-Value Ratio (LTV) – Banks do not lend the full value of the property, requiring clients to make an initial down payment. The minimum down payment is typically around 10%, although some banks may require 20% or more, depending on the operation.
- Insurance – The cost of associated insurance, such as life insurance and home insurance, can significantly impact your monthly payment. It’s important to choose a proposal that allows you to obtain insurance from another company without negatively affecting the loan terms. To help with this, your Lead Kash consultant will also assist in finding the best insurance offers.
How to Get Multiple Mortgage Offers Quickly?
The process of obtaining a mortgage is bureaucratic. It requires gathering documents, completing loan proposals, and negotiating the loan and insurance terms with the financial institution. Now, imagine having to do this with multiple banks.
To make your life easier, there are mortgage intermediaries like Lead Kash who handle everything for you. Not only do you save time, but you also save money, as they will negotiate the best terms for your mortgage. For example, did you know that different branches can offer different terms for the same client? And how would you discover these branches?
It’s important to know that the entire process of mortgage intermediation, along with all consulting services and clarification of doubts, is free of charge for you. Regulated mortgage intermediaries are prohibited from charging clients for services, and doing so would be a violation of the law.
How to Move Forward Without Obligation?
If you would like to receive several mortgage proposals tailored to your specific case, we suggest that you fill out the form below or make a simulation. One of our consultants will contact you to provide a detailed overview of your situation and offer all necessary clarifications.
