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In today's blog we will see some of the basic concepts about mortgage loans and to be able to apply for a 100 percent mortgage and have all the information to make the best decisions.

Concepts to apply for a 100 percent mortgage

Interest rate

You can find two types of interest: variable and fixed. It is important to have a prior idea to know what is the best option to apply for your mortgage. Depending on your needs and employment and economic situation, it will be better to choose one option or another. Let's see what they are!

The variable mortgages have a higher risk because the interests fluctuate throughout the mortgage loan. In this case, it is important that you have a good job and stability that allows you to face important increases in the Euribor. To make it the most favorable for you, the ideal is that you choose it when you want short repayment terms, such as approximately 15, although one of the advantages is that it can be extended to 40 years.

The fixed mortgages are perfect for those who want to take low risks and seek higher amortization periods. It will provide you with greater stability and security, but the interests are usually higher than in the variables and if you want to make low repayment terms, the installments can skyrocket.

Interests

It is very important to take into account a very important element of a loan and that is that you will pay more or less interest depending on the period of time in which you pay the mortgage. That is, even if you pay less fee because the term is 30 years, at the end of the life of the loan you will be paying a much higher amount for interest.

So it is important to assess the situation and consider whether you prefer to pay less monthly and go more relaxed with the monthly economy or, pay more monthly in order to save money from the interest on the loan.

Profile study for 100 percent mortgage

To get a 100 percent mortgage, it is important to meet the bank's requirements  and, ideally, enter one of these profiles:

• Officials.
• Young people with work projection.
• Buy a house from banks.

Guarantor

It is quite common that if you do not meet all the requirements or your profile does not convince the banks, they ask you for an endorsement or additional guarantees. The guarantee can be from a person or with a property. But it is important that you understand what are the conditions of accepting this:

• Guarantor . The person will have full responsibility for your debt with the bank in case of non-payment, they would have to pay off the debt and the bank could access their money, properties and real estate. The guarantor's risks are very high.
• Property. In the event of default, the bank would resort to seizing the property used as collateral for your mortgage.

Before making a decision that may have consequences that affect third parties or other property, it is important that you weigh it and evaluate if it is worth it. In case you have no other way to get the mortgage or if you do not have financing experts to help you get the best conditions , you will have to be sure that your job and income will not be put at risk during the entire loan.

APR and TIN

The mortgage APR allows you to know how much you will pay in total for the mortgage, calculating expenses, interest and the amount of money borrowed. You can see it expressed in percentages and this data is determined through a mathematical formula. It is very important to understand and pay attention to this information to know how much you are going to pay at the end of the loan and thus analyze which repayment term and type of interest are best for you.

The TIN is a concept similar to the APR, in fact it is prior to it, and expresses the total interest that you will pay at the end of the loan.

Linked products for 100 percent mortgage

To get a 100 percent mortgage, it is common for financial entities to ask you to link financial products with them: life insurance, home insurance, credit cards ...

The bank cannot force you to link products to give you the mortgage, but it can offer them to improve the conditions of the loan. In the case of 100% mortgages, when taking a greater risk, the most common is that they ask the client for this type of linkage.

100 percent mortgage savings

For a 100 percent mortgage, the big advantage is that it covers 100 of the home's appraised value. But even so, you will need to have a minimum of 30% of the purchase price of the property to assume the purchase and mortgage expenses.

To request a 100 percent mortgage , you will need the appraised value to be higher than the purchase price.

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