What mortgage can I afford?
2 February, 2023 | Antonio Beltrán
When talking about mortgages, there is no magic formula that will work for everybody. In fact, it is impossible to establish which mortgage is the best for you to afford before doing a market study and comparing it with your situation. So to say, there are as many mortgages as people, because there are plenty of possibilities waiting for you.
In general terms, the mortgage you will be able to afford will depend on different facts. The most important ones are the following ones:
- Monthly income. Your monthly income is a huge determinant regarding your mortgage. That is because the banking entities will provide you with higher or lower mortgages, depending on the money you earn at the end of the month. To get an idea, you will have many more possibilities to obtain a high mortgage that will allow you to buy your dream house if you do earn more than 2.000 per month. If not, the possibility of obtaining a credit enough consistent to buy the house you really want will be drastically reduced.
However, remember that it is vital for you that the monthly expensive regarding the mortgage is a maximum of 35% of your salary. If not, as the Banco de España suggests, that would put you in a delicate situation.
- Financial stability. Related to the previous point, banks also take a deep look into your financial stability before granting you any mortgage. Having a job with a stable salary and being an official are some factors that will increase your chance of success. Also, having no debts is a must for banks if you want them to give you a mortgage. Because, if they detect any unreturned credits, they will perceive you as a non-trusty person regarding financial aspects.
- They are one of the most important things to keep in mind before getting involved in any process of buying a house and obtaining a mortgage. If you want to be able to manage all of it with no stress, it is highly recommended that you have some savings for the down payment and start-up expenses. Usually, it is said that having 30% of the total house price saved, is a good starting point. In addition, you should have approximately the 12% of the trading costs.
- Debt repayment timing. The time a bank can give you to repay your mortgage will depend on many aspects. For example, the nature of the contract -at a fixed or variable rate-, your age, your debts, or your monthly income, among others. Regarding all these aspects, your banking entity will fix the timing. They are usually between 20 years and 30 years. You should know that, if you have more time to return the repayment, you will need to pay fewer fees per month. Nevertheless, if you have a less large repayment time, you’ll need to pay higher amounts of money per month.
Other important aspects
Other than the aspects we have already explained, you should be aware that there are other things that should be taken into account regarding mortgages. We are talking about age, other bills and expenses, and housing value.
- Age. Oddly enough, age matters in terms of the mortgage. The maximum term to finish paying a mortgage is up to 75 years. If you choose such a long term, the bank will take into account the income you will have when you retire in order to see that you can continue paying the mortgage and living comfortably.
- Other bills and expenses: there are different expenses of which you’ll need to be aware when buying a house. We are talking about the appraisal, notary, or register expenses. Furthermore, there are taxes and commissions that will differ depending on your CCAA or on your bank entity.
- Housing value: not everywhere has the same house prices, so make sure to choose the one that would better adjust to your personal needs!
Calculating the ideal mortgage
We could all agree that your salary is a good indicator of the total amount of money you could invest in a mortgage. As we have explained, paying in mortgage around 35% of your salary would be a great deal. In addition, having some savings before getting involved in any mortgage is a smart move.
However, it is not always easy to manage all that information properly, and especially if you are new to this housing world. That is why you could take advantage of Hipotecasplus. We work as intermediates between customers and banks and try to figure out which is the best mortgage you could get based on your personal needs and characteristics. We will then explore all the options that banks will offer you and pick the best one for you. We also negotiate with them until getting the mortgage or the conditions that will best fit your interests.
Moreover, you could use a free tool which we highly recommend having an overview. With our mortgage calculator, which you can find for free on our website, you will be assessed of the total amount of mortgage you will have to pay according to your needs and preferences. Thanks to that calculator, you will have the opportunity to see if you could eventually afford that mortgage or not.
Anyways, if you still have any more doubts regarding mortgage or any other related topic, do not hesitate to contact us, without any commitment! Remember that we will always be grateful to help you!
