Today we analyze the current situation of the mortgage market and the different types of mortgages available, while we are looking for the answer to the following question: How can I improve my mortgage?
But first, let’s understand what a mortgage subrogation is: according to BBVA Bank, it is that “both the debtor and the financial entity of a mortgage loan can be replaced or replaced by another debtor or other financial entity.”
This means that the subrogation of mortgage is When the holder can change his loan to another bank or financial entity looking for better conditions As a lower interest rate, different payment terms or an improvement in the contract.
The current situation of the Euribor
The Euribor is the most used reference index in Spain to calculate the interests of mortgages, and he himself has experienced a remarkable decrease in recent months. This change in this indicator has led to many mortgaged ones to be questioned about the convenience of subrogating their mortgage.
In other words, A decrease in Euribor means that users can take benefit with a lower financial load, thanks to the decrease in monthly fee of their mortgage.
However, it is important to find out about all the factors that are associated with a subrogation before making a decision. Since yes, the descent of the Euribor can be a cheaper mortgage, but it can also affect the bank commissions system, the cost of a new mortgage and even the terms under which the bank wants to establish a new mortgage contract.
What types of mortgages exist?
It is crucial to inform yourself about the different types of mortgages that exist in the market and what would be more convenient, even before considering the subrogation.
1. Fixed mortgage. It is characterized by an interest that remains equal throughout the duration of the loan. Its most notable advantage is stability, since monthly payments do not vary over time. However, their main disadvantage is that they usually have higher interest rates compared to variable mortgages. If you are looking for interest reduction, this may not be the ideal option.
2. Variable mortgage. It is generally linked to a financial index such as Euribor, and its interest fluctuates over time. Mortgage owners can benefit from this interest during moments of falling, as is happening now with the Euribor. Its risk is that if the chosen indicator increases in the future, monthly payments would also.
3. Mixed mortgage. These are a combination between the previous two: during the first years the interest is fixed and then changes to variable. This option can be the most balanced, since it ensures a lower type at the beginning and then allows the beneficiary to take advantage of market casualties if interest rates continue to fall.
In the event that the Euribor is high when the variable part arrives, the mortgaged always has the option of subrogating his mortgage by a fixed or another mixed.
In the end, the decision on the type of mortgage you want to take depends a lot on your current mortgage, as well as your medium and long term financial objectives.
Additional considerations to subrogate
Among the factors that must be taken into account, in addition to the types of mortgages, we have the following:
– Costs and commissions. At the time of deciding it is important to evaluate in detail the associated costs ranging from opening commissions, housing appraisal and others as notarial and registration expenses. These costs can add a lot to the final amount, and even cancel the benefits that would be obtained from a lower interest mortgage.
– Conditions of the new loan. You have to thoroughly review the conditions of what would be the new mortgage before subrogating it. The conditions may vary from one entity to another, which converts research into an essential step to determine if you would be receiving a better offer than the current one.
– Personal financial situation. The personal financial situation is a key consideration when subrogating a mortgage because it can directly affect the applicant’s ability to deal with long -term payments. Although the Euribor has dropped, which could make the monthly quotas lower, if the financial situation of the individual is not stable or at risk, this could generate difficulties in maintaining payments.
Aspects such as income level, job stability, available savings or existing debts are determining factors to assess whether subrogation is really beneficial in the personal context. A person with a more tight financial situation may not benefit so much from the descent of the Euribor, and in fact, the cost of subrogation (for example, notary expenses, commissions, etc.) may not justify the change if their economic situation is not solid.
We must take into account other benefits at the time of subrogation
The mortgage subrogation offers several benefits, one of the main ones being the possibility of reducing interest payment. By changing the mortgage to an entity with better conditions, such as a lower interest rate, the borrower can save significantly in the long term, reducing the monthly fee and the total cost of the mortgage. This is especially attractive when the Euribor lowers, since it can make the subrogation conditions more favorable than the initials of the loan.
Another important benefit of subrogation is the possibility of eliminating or reducing products related to the mortgage, such as additional insurance, cards or services (for example, alarms) that are usually associated with mortgage loans. When negotiating with another entity, it is possible to obtain a mortgage without these products, which can generate additional savings. In this way, subrogation not only implies saving in interest, but also in additional costs, making the mortgage easier and more economical.
In summary, whether your approach is, for example, to improve your financial situation with better deadlines or lower costs in commissions, it is important to ensure that the option you are really using gives you greater benefits than your previous entity has.
Evaluate your options in detail
It is clear that there are still different factors that should be studied before deciding to subrogate a mortgage, despite the descent of the Euribor. It is important to keep in mind that the final decision depends on your needs and how they fit into the new conditions of your long -term projects, even though the current context may seem favorable.
If you feel that subrogation can improve your financial situation, do not hesitate to explore the options you have available. In the end, the key is to look for the best way to optimize your mortgage credit and ensure a stronger future.
Although the Euribor has been experiencing a recently downward trend, many banks are also lowering their mortgages for a fixed and mixed interest rate. This means that, at present, it is possible to find fixed mortgage offers with very competitive interest rates, close to 2% Tin. This situation means that, even with the descent of the Euribor, subrogate a variable mortgage to a fixed continues to be an attractive option for many borrowers. This is especially relevant to those who seek stability in their monthly payments, since a fixed type mortgage guarantees a constant quota throughout the loan’s life.
On the other hand, although the Euribor is around 2.4%, to this value the differential applied by the banking entities must be added, which increases the final interest rate of the variable mortgages. At the moment, those who have a variable mortgage with a more differential Euribor greater than 2% could benefit from a subrogation to a fixed mortgage, achieving a monthly savings of around a point in the payment of interest. This is a significant long -term savings, especially when fixed types are at such competitive levels, which makes the subrogation to a fixed mortgage a profitable and attractive option for those who seek to minimize their financial burden.
#good #time #subrogate #mortgage #descent #Euribor
