Apr 07

Costs to consider when hiring your mortgage

New section , designed to effectively manage the domestic economy. From here we’ll show you some tricks or things to keep in mind when managing the economy that really interest you . The first post in this sense is relative to the cost of the mortgage.

The first thing everyone should know is that there are a number of costs to consider if you hire a mortgage, and not only repay the principal with interest thereon . From here, you explain them .

What expenses involves hiring a mortgage ?

Hiring a mortgage , initially , carries a number of expenses that must be taken into account. We list them :

Arrangement fee : amount paid upon signing the mortgage loans , and that is usually a percentage of the amount borrowed . This is included in interest on the loan , in calculating the annual percentage rate ( APR) .
Notary : Due to the contractual nature and extent of the agreement, ie , the amount borrowed from the bank to the particular need for a third party , in this case the notary act as a witness in a public contract . In this sense, we also run legal costs , which is usually also a percentage of borrowed capital , which , for a € 200,000 mortgage will be: 500 € approx .
Expenses of property registration : all have an owner property , which must be properly registered in the Land Registry , and is mandatory by law Like other expenses , usually a percentage of the value property , which is usually about half the legal costs .
Taxes : As with any other purchase, in which you pay a tax ( in the case of goods and services is VAT ) , when we buy a house we will have to pay the tax due , which in this case is the Stamp Duty Tax except the VPO , exempt from this tax . The amount of the tax payable will depend on the CCAA , which have transferred the collection of the same, but always a % on Remortgage .
Agency costs : if instead of us who do all the previous steps , is a gestoria who handles , we also run these expenses , so it is perfectly avoidable expense .
Appraisal costs : Finally , we need to assess our home . This is done by a person or group of persons suitably qualified in this area, and is usually around 0.8 to 1.0 per thousand of the value of the home .

Therefore, when hiring this mortgage , should not only take into account interest payable in the first year , but also each of these costs , which sometimes can become up to 10,000 Euros . It is unusual for banks to negotiate only with the interest on the loan , not taking into account the initial expenses of the same , sometimes even more convenient is negotiating mortgage expenses of it ‘s own interests .