Apply for a mortgage loan: How is the installment made up?
We all want to buy a home where we can have the lifestyle we've always wanted. However, it is often necessary to apply for a mortgage loan in order to make that dream come true. This raises an important question for us: How is the monthly fee that I have to pay for the financing made up?
Sky Marketing strives to be Pakistan's biggest real estate developer ever, guaranteeing the highest international standards, prompt execution, and lifetime customer loyalty. With projects like http://www.skymarketing.com.pk/islamabad/capital-smart-city/
It is normal to have doubts about these types of concepts. That is why at Nexo Inmobiliario we want to explain everything you need to know about the composition of the monthly fee.
The sum of the monthly payments that you must make to pay the loan to the bank is made up of several variables. The slightest change in any of them will result in a different monthly fee. Here we show you all the aspects that you should consider:
1.- The value of the credit
Let's start with the value of home equity , which is a fairly simple concept. It is the sum of the loan that the bank will grant you and which is established according to the value of the property you wish to acquire. This is the amount that you will pay to the bank each month. Also, interest will be added to it, which is the amount that the bank charges for lending you the money.
2.- The first installment
Another factor that you should keep in mind when requesting a mortgage is the first installment. As you should know, all banks ask you to have a minimum of 10% of the total value of the property in order to grant financing.
If, for example, the cost of the apartment of your interest is 400,000 soles, you must have a minimum of 40,000 soles. The Bank will be in charge of covering the remaining 90% of the value of the property. Now, the minimum is 10%, but it is recommended that you pay the highest possible amount in the first installment.
Why? Well, the larger the amount you pay in the first payment, the lower the monthly installments. By paying a first installment of, say, 30%, the loan amount would no longer be 90% but a more accessible 70%. Consistent with this decrease, the interest would also be reduced, which is very beneficial for you.
3.- The payment term
Another very important variable for the value of your monthly payments is the term. Why is it so relevant? Well, as you should know, each bank gives you different terms to repay the loan money. In general, these financial entities offer you periods of 10, 15, 20 and up to 30 years to pay.
What one wants most is to pay off the debt as quickly as possible, so choosing the shortest term would be the most logical option. However, the shorter the period you choose, the lower the total amount you will pay, but the monthly installments will be higher, since you must return the money in a shorter time.
On the other hand, choosing the longer term will result in smaller monthly payments and even, in some cases, almost imperceptible. However, the total amount you will pay to the bank will be much higher because the interest will also grow.
4.- The interest rate
This is perhaps the central variable in a mortgage loan. ¿ What is the interest rate ? Well, this is the amount that sets the price of the money you borrow. In general, most banks offer you fixed rates and variable rates. Here you will get to know them better:
What is a variable rate?
Interest rates are not always the same, they vary over time. The change occurs on a daily basis, which may seem like a minimal factor, especially if we consider that on this time scale the change may be less than one percentage point. However, the difference becomes more noticeable when you review the rates on a monthly and annual basis.
This change in interest rates is not always towards an increase, they can also be reduced. Therefore, if you choose a variable interest rate, your payments over the period of time that you must repay the debt can increase and decrease according to market conditions.
What is a fixed rate?
In contrast to the previous alternative, the fixed rate is established at the time of requesting the mortgage loan and remains unchanged throughout the term of debt payment. If you choose this alternative, you should try to access mortgage financing at a time when interest rates are particularly low.
Very good! If you had doubts about the monthly installments that are paid when acquiring a mortgage loan, now you know how they are composed and the factors that influence the amount. Remember that in Nexo you can find your favorite bank and apply for your mortgage loan in order to finance your dream home.
In Nexo Inmobiliario you can find the main real estate agencies in the country and their various projects. Are you looking for the ideal apartment, house, lot or office? Enter our official page and find your dream property just one click away.