At UrbiSeg, we explain five things that homeowners like to know before buying a house.
Buying a house is always an important moment in a family's life, but it is also a time for reflection and some concerns. Between gathering all the necessary documentation, requesting several proposals from various banks, and analyzing and comparing them, the mortgage process can be quite stressful. In the end, due to inexperience and even a lack of knowledge on the subject, buyers end up making decisions that are not always the best ones.
When buying a home at UrbiSeg, all your questions will be answered so that you can make a safe and happy purchase.
Your bank may not have the best offer for you
Simply put, if you are already a customer of a bank for other products, when you request a mortgage offer, this entity will not have to “work hard” to win you over as a customer, which means that the offer may not be the most advantageous for you.
Therefore, you should look for different offers from different banks and compare everything, from rates, spreads, commissions, terms, among other costs involved in the process of buying a house.
Making this analysis and comparison is essential, not only in choosing the best offer, but also in negotiating it.
The spread is not always the most important factor
When it comes to mortgage loans, the indicator that usually receives the most attention is the spread. This is indeed important, as it represents the interest that the bank will earn by granting you the loan, but there are other elements that you should analyze in the proposals presented to you.
We are currently experiencing very low spreads, reaching 1%, so the bank will certainly try to compensate by selling other products, such as life and multi-risk insurance, credit cards, salary accounts, among others.
For example, if you have a proposal with a low spread, but life and multi-risk insurance with a very high value, you may be better off with a proposal from another bank with a higher spread and lower insurance, especially since the value of these tends to increase over time.
You are not required to take out insurance at the same bank where you take out the loan
There is a widespread belief that the entity that provides the mortgage should be the same one that provides your life and multi-risk insurance. These are mandatory requirements imposed by banks, as they are a guarantee against the risk associated with mortgage loans, given that the amounts involved in this type of financing are always high. However, we would like to point out that it is not mandatory to take out life and multi-risk insurance with the same bank that grants you the loan.
Insurance premiums can be as burdensome as the loan itself, so you should carefully evaluate the various options, both within and outside your bank, for life and multi-risk insurance. Only then will you have an idea of which option is most advantageous for you.
Documents required for a mortgage application
The process of financing a home is quite bureaucratic, divided into several stages, each requiring different documents.
During the credit analysis and pre-approval stage, you can expect to be asked for documents such as your income statement, identification document, or Bank of Portugal (BdP) liability statement, among others.
In the next phase, the property appraisal, you will be asked for documents such as the property registration certificate or floor plan.
Finally, at the time of approval and scheduling of the deed, you will need documents such as an energy certificate, occupancy permit, or approved construction project, for example.
To help you gather all the documentation more efficiently, we suggest that, at the beginning of the process, you ask for a list of all the documents you will need at the different stages. This will help you avoid waiting for documents and, consequently, delays in financing your home.
Credit costs and after purchasing the property
The amount you will pay for your home is not just the amount paid to the seller. When buying a home, you should expect expenses such as IMT (property transfer tax), stamp duty, and deed costs, among others. Subsequently, you should also not overlook other expenses that will have an impact on your family budget in the long term, such as IMI (property tax), condominium fees, property maintenance, or capital gains tax, if applicable.
You need to take into account the costs of the process, taxes, and mortgage fees, as well as the taxes and expenses you will have to consider after purchasing the property.
Being informed, requesting and analyzing several mortgage proposals are the watchwords when choosing the best credit option and will certainly help you maintain the health of your personal and family finances.
It is a somewhat bureaucratic process that becomes much easier with the help of a specialist.
For any questions that arise during this process, and there will certainly be many, you know that UrbiSeg is always at your disposal.
Source: idealistanews