And most of those who access this type of credit pay instalments, month after month, for thirty years. Confidence is also given by perceptions of education, with 80% of them saying they know how to manage their money. Young people are optimistic and confident in their abilities, but you always go right by talking to a mortgage advisor in London to make the right choice.
Loans for purchasing a home represent approximately 60% of all loans the entire banking sector grants to the population. The most common are mortgage loans, where the property purchased or built guarantees the contracted loan, or real estate loans, where other properties are used as collateral. 10-15 years ago, people's most common mistake was acquiring housing loans in a currency other than the one in which they earned their income. For example, approximately 80% of loans for purchasing a home contracted in 2005-2010 were in foreign currency. Now, only 5% of them are.
Do People Need Help to Buy Their Dream House?
People had learned from the experience of the financial crisis since then when the national currency depreciated rapidly in a short time. However, what did people not know? Well, most people go into the bank and ask: what's the maximum credit they can qualify for? Fundamentally, the question is wrong! First, they should ask themselves: what type of house they can afford and ask for the help of a mortgage advisor in London https://londonmoneyman.com/ to get them through the entire process! Given their family income, people need to think about the maximum home value they can afford.
Rules to Consider when Buying a Home
First, consider only a stable income that you know you can rely on for the long term. So don't consider temporary bonuses, parents' pensions or selling assets. Secondly, 10% and 20% reserves are necessary for unforeseen events or higher expenses. That can reach up to 30% or even 40% if you have more than two children, health problems in the family, a more risky job or income that fluctuates strongly from one year to another. Read everything about him on Londonmoneyman.com to be prepared for what it's coming.
How much can you afford? That is a question that every wise buyer raises with responsibility. Everybody wonders how much they can afford when buying clothes, shoes, a vacation or a car. Why not ask yourself the same thing when making the most important transaction of your life https://www.consumerreports.org/banking-credit/are-mortgages-now-harder-or-easier-to-get/, buying a home in London?! Thus, in periods of economic growth, optimism sets in all layers of society, and expectations are for the better (incomes increase, new opportunities appear, financing institutions become more "generous", etc.), so more and more people think that it is time to make an important decision, such as buying a house.
What Should People Learn from this Experience?
That it is preferable to buy a house in periods when the economy loses its edge (decelerates), incomes do not grow as fast or stagnate, and the supply is insufficient. Then the buyers are more thoughtful (especially since they don't face price increases from one day to the next), and the sellers don't hold the price very much because they don't have a clear perspective on when the economy could return to growth and, with it, general optimism. At this moment, analysts estimate that the economy is losing speed, and those who wish could wait another 2-3 years to buy a house at the most advantageous price.
But, beyond the price, there are other aspects that you must refer to when choosing your home https://www.fool.com/the-ascent/personal-loans/articles/7-factors-lenders-look-considering-your-loan-application/. The first aspect is related to the area, which must be selected according to accessibility, the distance to the office/school/kindergarten/other destinations of interest (traffic is a growing problem, at least in the main cities), but also according to preferences (quieter/more congested area, central/district, house/apartment). After delimiting the areas of interest, the research of the offer in the respective regions follows, possibly through a mortgage advisor. This aspect also involves a commission paid to him after he has found the house you want.
How Do You Prepare Your Budget?
You must also prepare the budget because you need to know from the beginning if you can pay for your dream house. There are few cases when someone can spend the entire house in cash without a bank loan. As a result, when creating the budget, one considers one's own money (the required advance at the bank is, in principle, 15% - 25%) and the loan that can be contracted, depending on income. When thinking about the amount, buyers think only about the house's price, but they need to consider the other fees that they need to pay, from the notary to insurance and legal fees.
Attention to bank credit! To what level are you in debt? It is recommended not to go with the degree of indebtedness (rate at the bank from the family income) to the maximum, especially if the payment is not very high, considering that, in general, loans for London housing are granted with variable interest and are for long terms. What happens if you have borrowed up to the maximum limit you can bear (monthly rate in income) and the interest rate increases? The rate also increases, which will become an onerous burden. Therefore, you must take a margin of safety.
The bank must present you through a mortgage advisor with a pessimistic scenario (an example of calculation) for the case where the interest rate increases by 0.6 percentage points. However, some banks present this scenario for gains of 2-3 percentage points in interest, respectively, the impact of this development on the bank rate. The request for financing from the bank does not have to wait for the housing to be found. Things can go in parallel so that the funding is approved when you see the house.