Archive for the ‘Mortgage Refinance’ Category
Following today’s decision unanimously in the Senate, referring to the removal of soil clause included in mortgage contracts, Ausbanc wants to show publicly welcomed this initiative and that the clause, which prevents mortgage although lower than the Euribor do so, constitutes an abuse by the banks, which harms the economic interests of consumers. As published in various media, the Senate has already approved the deletion of the clause in mortgage land. This clause, which apparently existed since time immemorial, it has become fashionable since our dear Euribor has decided to take a vacation and lose miserably. Of course, this comes to them fatal banks, so they’ve had to resort to this clause that imposes a minimum at which the transactions are tied, no matter which reaches values.
I do not know what you think, anyway Congress has to approve it, but if it goes ahead it seems that banks will have to seek other tricks to gain right?
This type of clause provides that in the writings of some mortgages there is a paragraph which stated that although the Euribor lower and lower, the minimum rate to be applied shall be 2%, 3% or even 4.5%.
The block Senate urges the Government to remove the soil clause mortgage:
- The Upper House plenary session this morning approved a motion by the parliamentary group in which the Government claims the implementation of measures to prevent the abuse of some banks in the review of mortgage loans. The ground clause, which prevents down mortgages, has focused criticism from consumer associations in recent months.
- The initiative passed the Senate enforces amended text of the General Law for Protection of Consumers and Users (Royal Decree 1 / 2007 of 16 November), which provides for exclusion of unfair terms.
- It also calls for improving consumer protection in financial services proceeding to ask the Bank of Spain the development and referral within three months of a report on the existence of clauses in mortgage contracts that limit the rights of users , identified the lack of reciprocity and proportionality.
Institutions know that never reach the ceiling of 10% set their mortgage contracts, along fixing soils of 3% and 5%:
- In addition, claims to establish the effective translation of declines Euribor quoted at 1.247% – the share of mortgages, so that people look better when the Euribor contracts fall as the current rates.
- Senator the DB by Segovia, Francisco Javier Vazquez, was pleased to be able to reach an agreement that will benefit two of every three citizens who have mortgages, if the Government complies with the constitutional obligation to implement the mandates Parliament.
- During his speech, echoed consumer groups and users for months denouncing the existence of mortgage terms that prevent users benefit from as low as Euribor today, because many of the contracts signed in ceilings years contain 14% or 15%, that financial institutions know that will never be met, while the soils were between 3% and 5%.
A non-advertised
- The popular senator criticized that such clauses did not contain advertising of loan contracts and in many cases were not warned consumers, being able to have incurred a lack of transparency in the inclusion of clauses on the type of imitative interest “.
- Thus, the popular parliamentarian denounced the practice of some financial institutions, with at least dubious interpretations of legislation to protect consumers and users, prevent impact contract Euribor downs of mortgage loans.
- “These practices may be considered unfair within the banking sector, since its purpose is to prevent mortgage fees are reviewed in their entirety Euribor declines,” he said.
- Vazquez warned that such practices may violate the General Law for the Protection of consumers and users that establishes the exclusion of unfair contract terms.
As important as knowing how to negotiate a mortgage is to know all expenses that will affect the formulation of a purchase and sale, and although for practical purposes in most cases be the same bank that you will spend a minute of the manager in charge , it is worth that ye ye that ye may know in advance which are the same and, of course, consider whether you are interested in who you hire to do the necessary steps.
Expenditure
Valuation fees
Assessment is made of housing mortgages, as required by law to mark this assessment will be taken by the Bank as a reference when grant the amount requested. Generally, the amount granted to us will be between 80 and 100% of that valuation.
Insurance
It is normal to have to make a disability insurance or death, so if you happen one of these two cases would be the insurance that would take over the outstanding amount of debit. Also usually done, but not required, with home insurance to cover any eventuality that may happen to the mortgaged property.
Cost
These are the expenses incurred in connection with the handling of the sale of housing, its subrogation, mortgage cancellation, etc. Processing includes the Land Registry, the cost of completing the Transfer Tax in case of sale or of Stamp Duty in the case of mortgages.
Taxes
Apart from taking into account the VAT, or in the Canary Islands IGIC, we must also take into account the ITP for purchases of existing homes and new housing IAJD.
Land Registry
Is the public body responsible for keeping a record of all real estate in the country, whether rural or urban. He will have to go when looking for a home second-hand for a simple note to find out if it is free of charge or not.
Notary
Notary is legally certifies that the public document which notes the operation performed. It formalizes and subsequently a deed must be recorded in the Land Registry mentioned above.
If the dealer does not pay, or pay exorbitant interests, individuals lend to each other. This is the philosophy that lies behind a recent phenomenon known as P2P Loans, Peer-to-Peer Lending. Getting credit for a particular via the Internet is relatively new in some country, but not in the U.S., where this business model has already served four years. But loans are also known as P2P in United Kingdom, Germany, Italy or Japan
Confidence
One of the most important person to person lending is trust. In the traditional offline model, this trust is placed by the lender in which the borrower and is based on the existence of a strong hope in returning the borrowed. This means knowing the person you are going to ask for money and have a relationship close enough so that he would not “trust” and pay the money. The trust must be generated a priory, assuming a prediction of fulfilling a commitment, a statement about what is uncertain and can not be verified, in this case because it refers to a future outcome that will service the loan, plus interest. The advantages of this method is that it eliminates the bank as an intermediary, putting together web sites directly to lenders who need to borrow, with the advantage of obtaining lower rates than they would at a bank or through credit cards, as lenders get high returns on their investment, at least higher than depositing money in a bank.
Individuals ‘bridge’ to the Bank
P2P Loans offer citizens the possibility of social lending, a new form of financing carried out directly by people willing to lend money. Before the economic crisis in which we find ourselves, traditional financial institutions becoming more expensive credit. Whether done through friends, relatives or strangers on the Internet, people are turning to micro subsidiaries responsible for granting loans, instead of going to lending institutions such as traditional banks. This trend is experiencing a growing popularity because it offers often at rates more favorable than they can provide traditional lending institutions. For its part, the person offering the loan also benefits from this type of transaction, as you gain greater economic return compared to what they would put their money into a conventional investment method, receiving higher interest rates directly from loan recipient.
Introduction to loans per to per
Hardly anyone would lend money to a stranger. Thus, in cold, very seductive idea. But new technologies, Internet and development of social networks have brought consumers a new way to seek funding and lend (invest) certain amounts in exchange for an interest. Platforms are loans between individuals: anonymous citizens who solve their money problems, without the intermediation of traditional banking.
P2P Banking concept comes from a very common practice done throughout history, long before the development of the banking system or the use of currency. The loans made directly from family, friends or acquaintances have always been a source of funding for those who need liquidity. Normally, the amounts provided are small compared with the agreements of the big banks so that shape what we would today call “micro finance.” These loans are generally without collateral or guarantees, the money is paid based on a previous relationship that allows the loan, the collateral for these loans is done on trust.
If you are really interested in the social aspect of this “skipping to the bench,” becoming a bank yourself.
Bidding System
The mechanics are straightforward. If the borrower is trusted, starts an auction among lenders interested in taking that risk in exchange-course-of a juicy rate: between 8% and 10-12% in most cases. A higher level of creditworthiness of the borrower, the lower the profitability, because it assumes less risk. One also minimizes that risk because it lends itself to many different people at once. Borrowers can apply for up to 50,000 euros to pay a maximum of four years
It is time to invest in a home. We want to buy a house and we know what it is. But as important as knowing exactly what we want to live, is known throughout the mortgage offer on the market. Keep in mind that our future is in that mortgage, which will be years that we will pay it, and that what we get now negotiate and defuse before signing it, will revert to our benefit in the future. It will be a game between two contenders, in which each within its capabilities, endeavor to bring the rope to his side.
Mortgages
Preliminary
Always remember that you are the customer and banks you live, no matter how small you are. Do not go ever with a passive or proving that you need that money. Always remember that the bank competes with other banks and that therefore, everything possible will not remain with him. If he sees you hesitant or unaware of the topic, they will take the dominant position and take the lead.
For all that, the first step that you give to start all the mortgage process is to know the offer on the market. Probes. Move by Internet. Find out what each bank offers and what you can ask. Be clear about the amount, term and interest with which you can play, because that will give you security and will face the business of the bank, he will see with different eyes.
Request for mortgage offers
When they may know the existing mortgage offer and what each bank offers, he conducted in person at branches. Enter through the security door and say what you want. Remember, active attitude, the singer’s voice must carry you always.
Once in the branch hear what you offer, but never at this stage of listening to offers, aceptéis no. What you see is not anxious to close the deal. You will have to know basically the end fees, early termination of the early repayment terms and interest rate, and, of course, what the bank needs to access a better interest rate. That is, keep in mind that the more you get in that bank assets, the more likely it is that the differential. Salary paid directly asked of you probably, two or three bills, cards, life insurance and even home insurance. Ideally at this stage is to search for offers different deals 10/12 to study quietly at home then. Begin with your own bank because to do so, fidelity is a degree to be considered and a major asset in the future negotiations. But also within the same bank, attended several branches because they might surprise you to give you notice that there are managers or business with which it is easier to “bargaining” with other, either because they have to achieve economic targets or by the very attitude of the person facing us.
Selected Offers
Of all the initial offers must stay with a 3 / 5 of them to proceed to negotiation. Going in order of importance, as you see you can agree you better. The negotiations will be tough, but you must know the points where you can “bargain”. Generally, the fee, the partial cancellation and the differential are the points that you can try to reduce. Use your letters one by one; nothing to remove all the guns at once, but above all, show that you are interested to be faithful to the bank and that you involucraréis in your business, offering payroll card or receipts. This is your best weapon. Manejadla with caution.
Finally, seek the appropriate time to demonstrate that you know the market offers, and let it drop without acrimony conditions that other banks will offer.
Closure of the transaction
Already have the 3 / 5 final bids on your hands after bargaining. I must decide calmly at home. Choose one where you feel most comfortable, where you give more long-term safety and return to the bank. Try one last bargain on the grounds that you come to close the transaction.
This is the last phase, the critical, where you will reach a mortgage agreement. Consider the importance of this because it is likely to mean years and years of association with that entity, which probably household payroll or receipts, expenditures will have their cards, and so on. and where it will probably ask other loans (for a car, for study, to improve housing, furniture, credit fast).
We assume two things:
• Know what you want.
• Has sufficient offers on the table to consider that any of them are good, and nothing left on the market better.
However, before deciding, and to reach an agreement, you must have a strategy, and is as follows.
1. Select the three best deals
With all the data already available, is able to make a comparison table, which contains data on all bids.
Make a simulation taking into account the amount of money going to apply, with the notary fees, land registration, documented legal, administrative, fee, interest during the first period, following by reference to the interests of today etc.. and calculate the total price to be paid by each of the tenders.
From there select the three best offers. Which you believe best meet the requirements you want.
Maybe some of them are not necessarily be the best economically, but still acceptable because it values like service, prestige, etc, etc.
2. The “penultimate” negotiations: to improve and learn
Are you in the most important moment in the negotiation phase, since it is almost ready to decide.
But before all this it is necessary to close many ways, because what may be a very good offer, ultimately, can be very bad.
Example: suppose you have an unbeatable offer with conditions, and if it were only for her, signed automatically. Now, suppose that bank / box requires a series of requirements that are absolutely incompatible with point of view you. For example, imagine that you require, along with the mortgage:
• A home insurance with very poor coverage.
• Life insurance that does not need
• A pension plan that does not want
• Two credit cards not accepted
• An Endorsement of which no.
What seemed like a candidate, ultimately, is rejected by factors other than the mortgage.
Think that is going to “marry” with the bank, which will use it daily, you will need household bills, ask for another type of credit, etc. Therefore, you need a bank / box that suits beyond the mortgage.
If you think you are good all or almost all the issues that will raise, it’s time to “squeeze” some more.
That is, if the mortgage origination fee is 1%, it is time to demand to stay on 0.5%. Or if gestoría costs are $ 200, it’s time to demand that it be 150. Do not try to “bargain” all conditions, but “some” to see if he can thrive.
Do not give the SI yet, leave it to the next meeting.
3. The DECISION
It is on the table the three best offers, and already know of all banks / boxes their conditions, their ways, than they would for other types of services.
Well, decide the best, taking into account all factors.
In many cases, need not be the best deal on the mortgage, but if one of the best, and besides, that bank does not require a pension plan or life insurance gives free cards, etc.