How do you choose a variable or fixed mortgage? What elements must be assessed before hiring a fixed or variable mortgage loan? To start, you must consider your way of being and your situation. In other words, if you go exceptionally far and use almost all your savings to enter the mortgage, a variable-rate loan will surely fit your finances better.
You can always change the mortgage, either within the same bank or by changing entities. The first would be a mortgage ovation, and the second a subrogation. The new mortgage law favors changes from variable to fixed mortgages and improves the conditions for fixed-term loans.
Changing the variable rate mortgage to a fixed rate and vice versa is not complicated, and you should not be afraid to negotiate with your bank. Your starting point should be that everything with the bank is negotiable, provided you have arguments to support it. Most entities make their numbers and are clear on how far they are willing to go for a client of your characteristics. Use this link to find out if it contains information about you changing the interest rate on your mortgage, and if so, do not be afraid to ask.
Mortgage Dictionary
In order not to get lost in the world of fixed and variable-rate mortgages, there are specific terms that you should know. They are the ones that will appear in your mortgage contract or in the offers that banks propose. These are the most important mortgage terms.
What is the APR of the Banks?
One critical question that you should ask is the banks’ APR. The APR, or Equivalent Annual Rate, is the sum of the nominal interest rate plus the expenses and commissions associated with the mortgage. The APR homogenizes the interest rate of a mortgage on an annual basis and is used to compare the overall cost of a loan. The problem with variable mortgages is that this data will change as interest pays.
Also, for mortgages, this APR helps determine what it costs to change the mortgage bank since it includes the subrogation or novation commissions.
What is the TIN of a Mortgage?
According to the Bank of Spain, the TIN or Nominal Interest Rate is the effective price that the bank pays us for lending us the money. In this sense, it is the fixed percentage that you will pay for the mortgage without considering any commission. You can easily apply for TIN and get a mortgage. Only you will provide proof of loan repayment on time. You can do this by using your credit card as it is a reliable source for lenders. It will take 6 to 12 months to monitor your billing history.
What is the Subrogation of a Mortgage?
Mortgage subrogation is one of the formulas to modify the mortgage. Specifically, it is intended to change the loan’s creditor or debtor. In other words, to change the bank mortgage or to transfer the mortgage to another person when you sell your flat.
In a mortgage subrogation with a change of bank, it will be enough to find an entity that offers you better conditions and reach a binding agreement. From there, your bank will have 15 days to match the offer or let you go.
What is the Novation of a Mortgage?
Mortgage novation is another way to change or improve the mortgage. In this case, there would be no bank change but a renegotiation of the mortgage loan conditions with the financial institution.
With a novation, you can increase the mortgage capital, modify the interest rate, and vary the repayment term, the loan holders, and even the settlement system.
What is the Early Repayment of a Mortgage?
The early repayment of a mortgage is the early payment of part of the loan or the total thereof. In other words, advance part of the debt to shorten the loan term or reduce the installment. If you leave your mortgage before the end of the initial period and pay extra from the decided amount, you will have to mortgage an early repayment charge. It is equal to the remaining payment or 5% of the payment mortgage you have left to pay.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
