In Mexico there is a wide range of credit to buy a home, so much so that more than 80 types of mortgage credit are registered in financial institutions.
This range of possibilities, where each option has its own characteristics, terms and conditions, makes the choice of financing to buy a house or apartment much more complex.
With this situation, in + Money from Mexico Forbes We interviewed Juan Kasuga, director of Creditaria México to learn more about how mortgage credit works in our country and how we know that we are choosing well among the wide offer on the market.
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“In Mexico the French credit amortization scheme is used, unlike other systems, first you start collecting interest and at the end you start paying the capital; The behavior of the payment curve is that at the beginning about 95% of your monthly payment is applied to interest and only 5% is applied to principal. Over time that portion changes and is returned to the same level because in the first years you paid most of the cost of the money for the loan they already gave you,” said the manager.
In his opinion, it is important to be clear about how a mortgage loan is integrated in our country to know what criteria to evaluate when you choose.
When someone takes out a mortgage loan, the monthly payment they have to pay is made up of various factors:
- The interest involved in the monthly payment
- Capital amortization, which is part of the payment that will be applied to the debt
- Credit linked insurance (mostly life, casualty and unemployment)
- The credit administration and appraisal fees charged by some banking institutions.
Be careful here!: How to choose the best mortgage loan and pay it off in a shorter time
“The amortization of the cost of money comes from the interest rate and it is the information that is advertised in many banks, that is what people see and they often believe that this is the cost of a mortgage loan . That’s an important element, but not necessarily the one that determines which credit is best for you.
“These concepts above lead you to the total annual cost (CAT) which forces you to consider these costs as a whole. There are those who ask, if I am paying 10% interest, why when I add all the expenses that are not capital amortization I am paying 127 thousand pesos? That’s because those extra 27 thousand are other costs you have to pay, because they are inherent benefits of the mortgage loan,” explained Kasuga.
We recommend that you read: These are 3 key points before applying for a mortgage loan
A cheap mortgage loan is not always convenient
Instead of looking for the cheapest mortgage loan, it is recommended that you look for the one that suits you best financially.
“There are banks that multiply capital faster. It is essential to identify the banks that do this; It might be a good idea for you to take out that credit, especially if you want to pay it off faster. Let’s say that in a bank that doesn’t change much, maybe in year six of a loan for a million pesos, you need 720 thousand pesos, and in another bank that has more amortization, you might need 650 thousand pesos. There you already have a difference of 70 thousand pesos that you probably did not notice because you did not review the amount that each of the financial institutions had amortized month after month,” says Kasuga .
The good news is that to do this research on the entire shelf of commercial banking options in Mexico you don’t have to go from branch to branch, today you can request the services of a mortgage broker who, in addition to being supporting you with professional advice. , he will not charge one cent for it.
This comparison that is so sure for your finances the day you go to buy a house will not cost you any money, because the banks pay them a commission for each loan that is signed with them.
Learn more here: 6 things a mortgage broker can save you when buying a home and how much they cost you
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2024-08-01 02:02:33
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