Learn everything about how to get a Mortgage Credit, and be able to buy your next home.
There comes a time in life when you must leave the nest, and it is one of the most exciting and important decisions of your life. If you decide to invest in your future by buying a home and you do it through a mortgage loan, we recommend you review this checklist to ensure that you are ready and know what you are facing.
Requirements when applying for a mortgage loan
It is important that you know some of the requirements that financial institutions demand.
1. Minimum Age: although most banks require a minimum age of 25 years, you can find some entities that accept applications from people over 18, as long as they certify an active employment relationship with good income.
2. Maximum age: depending on the financial institution, the maximum age to apply for a mortgage loan ranges from 54 to 64 years.
3. Seniority: in order for you to have enough stability to cope with the debt, a working relationship of between one to three years with the company is required.
4. Good credit history: banks will consult the credit bureau to review your behavior with your debts, so they will know if they are up to date and if you pay on time.
5. Certification of income: through the certification of your income, the banks will calculate how much they can finance you and what the amount of the installments will be. They generally require monthly income between 9 and 20 thousand pesos.
You must bear in mind that not all entities require a minimum income to approve your application, so we recommend that you check with each bank if they have this requirement.
6. Domiciliary seniority : domiciliary seniority is required only in some entities. They ask you to verify that you have lived at your current address for at least six months.
7. Property free of liens: the property you want to buy must be free of any type of encumbrance. In case you want to buy a mortgaged property, you must pay off the debt and proceed to the deed.
10 steps to consider when applying for a mortgage loan
1. Have a clear account
Before applying for a mortgage loan, it is essential that you check how much money you earn each month and subtract what you spend on rent, food, transportation and any type of expenses and / or debts.
The money that results gives you an idea of how much you can spend each month to pay for the house.
2. You know exactly what a credit is and what yours will be like
It seems trivial, but many people commit to a mortgage without fully understanding the subject. In fact, there are many myths about them, here we demystify them.
3. Choose the bank
Once you are clear about your current financial situation, you have to choose with which bank you want to finance the property.
At this point it is important that you simulate credit with several financial institutions. Remember that they all handle different interest rates, economic references, terms, conditions and requirements, so we recommend you find out with various entities how your credit would be handled so that you can choose the one that best suits you.
4. You have significant savings
To obtain a mortgage, the most important thing is to know how much money you have for the down payment. The larger this is, the lower your monthly contribution will be or even the time you pay it. If you have not yet taken this step into account, it may not be your time yet, but we give you 8 tips to start saving your down payment and be ready when the day arrives.
5. You have a stable job
To know whether or not you are ready for this commitment, we recommend that you analyze your work situation with great honesty. Is your salary fixed or variable? Do you have growth opportunities? Do you have plan B in case this opportunity closes? Do you plan to be at your job for the next 2-5 years?
6. Your future plan is compatible
Your credit is like a son; once you have it, there is no going back. Try to imagine your life in 5 years, or in the near future. Are you still able to pay your mortgage? You should think about this decision in the long term and taking all factors into account.
7. You have no debts
Before applying for a loan, we recommend you pay off any other debt you have. Whether to your parents, cards or others. So that in case of something unforeseen, your hands are not tied.
8. You are prepared to pay your monthly payments on time and without debts
Mortgage loans do not wait for anyone. If you know that you will be able to count on your payment every month in a timely manner, you are on the other side! But if your payments are usually late, paying your cards late and so on, we recommend you think twice.
9. You have a good credit history
It does not matter which bank you apply to for your loan, they will do their homework to investigate how good a candidate you are, if you pay on time and if you have a good ability to pay. Make sure they run into excellent credit behavior!
10.You have all your paperwork in shape
If you have already completed all the steps in the past, you are on the other side! Now make sure you have all your papers in order, have defined the amount you will borrow from the bank, do your research on interest rates and define which banking institution is the best for you, and finally, choose the house for sale that is coming soon. it will be your home.
Select the interest rate
Banks offer three types of interest rates:
- Fixed rate: from the first moment you know exactly the value of the monthly loan payments.
- Variable rate: At first you pay a defined installment and then the monthly value of the installments varies depending on the Interbank Interest Rate (TIIE).
- Mixed rate: you can agree with the bank to pay the credit for a period at a fixed rate and another at a variable rate.
Time to sign!
The notary will meet you with the seller to sign the contract.
If you need help in your buying process, you want to make sure that there are no irregularities or you simply want to be sure of making the best decision, contact our real estate specialists! They accompany you and advise you throughout the process at no cost.
We are happy to be able to take you by the hand in this process and be part of the adventure. If you have any questions, remember that one of our experts will give you personalized attention to guide you until you find your new home.