In the complicated process of finding the ideal home, many people face a real financial puzzle. In addition to the cost of the property, there are a series of associated expenses that are often unknown to future buyers. In this context, a financial advisor known on social networks as ‘luis.asesor.financiero’, has explained in detail how much money do you need to save to buy a home of 250,000 euros, clarifying the expenses involved both in the sale and in the mortgage.
In the video, the expert begins his explanation by revealing that the purchase of a home It not only involves the price of the propertybut also a series of additional expenses which can cost thousands of euros. According to the advisor, there are two major categories of expenses: “First of all we must know that when buying a home with a mortgage there are two types of expenses: those associated with the mortgage and those associated with the sale, which are independent of the bank.”
Expenses associated with the mortgage
According to the finance expert, one of the biggest challenges is gathering the money necessary for the down payment: «With respect to mortgage expenses, you must keep in mind that you will have to have 20% of the down payment saved. So, assuming a home worth 250,000 euros, you should have €50,000 saved.
Added to this are other costs such as home appraisalwhich may vary between 400 and 600 euros: «Let’s assume that it costs between 400 and 600 euros, depending on the home. In this case let’s put 500 euros.
Expenses associated with the sale
In addition to mortgage-related expenses, there are costs of the buying and selling process.
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Notary fees: «Between 0.2% and 0.5% of the price of the home, let’s say about 500 euros»
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Property registration: «Between 0.1% and 0.25% of the price of the house, about 250 euros in the best of cases»
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Management fees: “About 450 euros”
Taxes: new home vs. second hand
The financial advisor explains that the taxes They depend on whether the home is new or second hand. If it is new “you would pay VATwhich is the 10% on the price of the home, about 25,000 euros,” he points out, although we must also include the stamp duty tax: «It is between 0.4% and 1.5%. In the best of cases, you would pay about 1,000 euros.
On the other hand, regarding the second-hand housingthe expert points out: «You pay the property transfer taxwhich is between 4% and 10%, depending on the autonomous community. We take on average 6%, about 15,000 euros.
The total needed to buy a home of €250,000
After breaking down all the expenses, the advisor summarizes the figures necessary to face the purchase in each case: «If you are going to buy a new home for 250,000 euros, you should have saved about 50,000 euros plus all expenses and taxes. In total there would be some 77,700 euros». In the case of a second-hand home, the cost would be somewhat lower: “It would be 50,000 euros upfront plus all expenses and taxes, which would add up to about 66,700 euros».
Finally, the financial expert points out that, although the path to buying a home is complicated, planning and making better financial decisions are key to achieving this goal. “I know, it’s crazy, something very difficult to achieve for the majority of the Spanish population, but if you manage to increase your sources of income and your savings capacity…”, he concludes.
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