Despite rate rises and inflation, it is still possible to take out an affordable mortgage: you just need to follow the right strategy.
Hard times for those looking for a mortgage to buy a house? Depends. Certainly the economic situation is not the best. And with interest rates soaring over the past year, meeting deadlines has become impossible for many. But it is precisely in moments like these that, by sharpening your ingenuity, you can also make excellent deals with the banks. The first commandment is: lower the installment. As? Let’s find out together.
Premise: a mortgage is generally considered sustainable when the installment does not exceed 30-35% of the salary. But with the significant increase in the amounts of installments of variable rate products recorded in the last period (in many cases they have doubled!), the proportion is now completely out of balance. Because while the prices of goods and services have increased, as have the installments, salaries have always remained the same (in the best of cases). Here is a series of tricks and practical advice for saving up to 500 euros on the instalment.
How to cut your mortgage payment
Holders of a variable rate mortgage have various options for saving on the repayment. The first is the renegotiation of the mortgage itself, which from 1 January 2023 banks are required to guarantee customers without investigation or appraisal costs. The rule applies to mortgage loans originally not exceeding 200,000 euros and to holders with an ISEE of less than 35,000 euros at the time of the request, and in the absence of delays in installment payments.
The deadline for renegotiating the mortgage is set at 31 December 2023 and applies to contracts stipulated (including assumption) before 2023 for the purchase or renovation of residential units. Renegotiation allows you to switch from a variable rate mortgage to a fixed rate one.
Another important possibility is mortgage subrogation, i.e. the transfer of the current loan from one credit institution to another without costs for the customer, who can therefore choose more advantageous contractual conditions. All expenses relating to the subrogation are borne by the new bank, which will also be able to change the residual duration of the mortgage and/or the type of rate. Or you can opt for the suspension of the mortgage for up to 18 months, however granted only for serious and documented health or work reasons.
There are also various tricks to make managing a mortgage easier. If we have multiple active loans, we can ask a credit institution to consolidate all debts so as to have a single monthly installment without running the risk of forgetting to pay one or more installments, and above all saving on interest. Furthermore, it is good to follow the performance of the financial markets even if we are not too familiar with the subject.
At least you should know how to juggle between the spread, the Eurirs (or Irs), the Euribor and the Taeg, to take advantage of the most favorable opportunities at the right time. And watch out for the costs of insurance policies: the suggestion is to read up and ask for various quotes from several companies before deciding who to sign up for the mandatory ones. If you don’t have major financial difficulties, you could define a repayment plan to pay off the mortgage more quickly, saving on interest.
2023-09-24 18:31:05
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