During 2020, as part of the strategies carried out by financial institutions to reactivate the economy in the face of the impact of the pandemic, interest rates were lowered in different financial products. Historically low rates occurred on mortgages, averaging 9.7%. Some institutions even offer interest rates of up to 7.5% on 20-year loans.
In addition to the drop in rates, most banks have improved other credit conditions such as:
- Reduction of commissions.
- Extension of deadlines.
- Reinforcement of insurance.
- Increase in the amount of financing to be up to 90% of the value of the home.
This means an excellent opportunity to buy a house, because if you do the math you might notice that, perhaps, you are paying a rent similar or even higher than the monthly payment you would pay to acquire a property with credit.
However, buying a home just because interest rates are attractive is no justification. It is important to review the numbers and understand if your personal and financial life moment is ready for this decision. According to financial experts, this is the correct attitude to take when faced with an opportunity of this type.
If you are considering buying a house at this time, at La Haus we share four keys that you should take into account, according to the experts:
1. Evaluate if owning is the best option for you right now.
To determine it, answer these questions:
- What are your main motivations for buying a house?
- How is owning a home directly in line with your goals?
- What else could you do with the opportunity cost of the money you’re putting into the house?
- What other goals may be affected by buying a home?
2. Plan a down payment of at least 20%
Although there are already many institutions that can lend you up to 90% of the value of the home, hiring more credit means that what you will pay for the property will be higher. Plus interest, insurance, commissions. The ideal is to provide at least 20% down payment. At La Haus we explain how to save money for your home.
3. Make sure you can afford the upfront costs of buying a property.
Most buyers forget that there are initial expenses that they run on their own, that is, no bank is going to finance you. For example the appraisal, notary fees, acquisition taxes and deeds. It is advisable to calculate 10% of the value of the property for these expenses.
You should also analyze the other aspects of their finances. Will you still be able to save for your retirement? Won’t this purchase throw your finances out of balance?
4. Don’t worry about not buying now, the low rates will stay for a while longer?
It is not worth rushing to buy a house. It is a great investment, in the long term, that you could regret later if you do not do it with the correct planning.
If you were already planning to buy a house, it is a very good time to get cheap credit. Remember that at La Haus we help you throughout the process. At no cost to you we accompany you from the search to the signing of your new deeds.