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HomeFINANCE7 mistakes you shouldn't make

7 mistakes you shouldn’t make

Buying a home can become a “headache” if not properly planned, but also because, in most cases, It’s the biggest investment a person can make in their lifetime.

Due to the values ​​involved, there are potential mistakes that can cost you thousands of euros and that you should avoid committing at all costs. Get to know some of them and how to avoid them.

Having no idea how much you can pay for the house

One of the mistakes to avoid is to go ahead with the purchase of a house without having any idea how much you can pay. So, you must first make sure of the maximum amount you can ask for a home loanso that your financial situation is not compromised and you are not disappointed, as you may not be able to buy what you want.

In the worst case, you may even end up buying your “dream home”, but in the face of an unexpected situation, such as unemployment, health complications, an accident or a sudden increase in Euribor rates, You may have to make great sacrifices to meet your obligations.

Therefore, you should not view the purchase of your home as an isolated transaction in time, but rather as a commitment of many years that you will have to bear. The less weight you have in your budget, the better it will be for your wallet.

Also read: Are you going to buy a house in 2022? Tips to avoid costly mistakes

Ignoring the importance of location and accessibility

Another aspect that you should take into account when buying a house is related to the localization and accessibility. You can possibly get a better deal (in monetary terms) if you move away from the city centre, but you need to be willing to compromise on some factors. Namely, accesses, existence of points of interest, transport, leisure facilities, in addition to the possible appreciation of housing in the future.

A good location and good access can often be synonymous with savings. For example, suppose you can find a 30,000€ cheaper house outside the city center, with the same characteristics, but it is 30km away not only from your job, but also from your partner. . This means that, together, they will spend approximately €16 per day to travel, assuming that each car consumes 7l/100km and that the price of fuel costs €1.90.

At the end of the month are around 350€ in fuel alone. This, without counting the time that both will probably lose in traffic. In addition, you must also take into account the wear and tear of the cars themselves, which consequently requires greater maintenance. Over time, the €30,000 you saved on your home purchase “disappears” due to other costs. Therefore, before making a decision, account for all expenses so there are no surprises.

Also read: Want to buy a house with housing credit? 7 precautions to take

Let your emotions get the best of you

When you find your “dream home”, there is a strong chance that you will try to do everything you can to buy it. Which often includes go beyond possibilities. Therefore, you should put your emotions aside when deciding what to do. really need and what you can actually afford. Otherwise, you can put yourself in a fragile financial situation that, at any time, can lead to non-compliance.

For that reason, you should focus on what really makes a difference for you. Is the house size right for your family? Are you in a good location for commuting to work and taking your kids to school? Is there a possibility that the house will appreciate in value in the future? These are some of the questions you should be able to answer. If, later, you manage to have some “luxuries”, so much the better. Nonetheless, Don’t let your wants speak louder than your needs.

Also read: Buying a house: costs, documents and taxes you should count on

Young man consults his tablet looking for indicators on house prices

Give a very low input

O down payment has a big impact when applying for your home loan. With a significant down payment, there is the possibility of having better financing conditions, which makes the final amount payable for the housing “more affordable”. If it is higher than the minimum amount (10% of the house price), it will show the bank that you have a greater capacity to meet the financing. As a result, the bank is able to offer you better conditions in the spread or at the level of the guarantees requested.

At advantages are not only at the time of financing, but also throughout the contract. If Euribor rates rise, the lower your current installment, the lower your increase. In “tightening situations”, it can make a difference.

Suppose you took out a 30-year loan with a spread of 1%. If the amount owed is €140,000, then a 1% rise in the Euribor rate implies an increase of €67.17 per month in your monthly installment. If, instead of taking on a debt of €140,000, you make a larger down payment and contract only €100,000, you can reduce that increase to just €47.98.

Current and future benefit difference

Also read: Buying a house: Ideal time to ask for a loan or the illusion of purchasing power?

Not counting the cost of taxes and commissions

You should bear in mind the amounts of commissions and taxes associated with the purchase of a home. Therefore, you should always read the European Standardized Information Sheet (FINE), where all the costs associated with your home loan are listed, including commissions and taxes.

For example, for a property that costs around €100,000 you will have to pay €951.96 in IMT (Municipal Tax on Onerous Property Transfers) and stamp duty. As for a property costing €200,000, this value skyrockets to €6,512.78, that is, six times more. Although the value of housing “only” is double, the tax to be paid is much higher. Therefore, keep in mind that these values ​​do not increase linearly.

In addition to these taxes, there is also room for commission payment which vary depending on the amount of credit and the banking institution. The bigger the funding, the higher the commissions. Therefore, when deciding on the best option for you, do not forget that the entry value is just one of the many expenses you will have to bear.

Also read: Leaving Parents’ House: Renting or Buying a House?

Spend all your savings on your home

Use all your Savings for home buying can prove to be one of the biggest mistakes. Currently, according to a recent analysis by the newspaper Expresso, the price of houses grows three times more than the income of families. However, that doesn’t mean you have to spend all your money to buy a house. In fact, if you do, you can lose both things: your savings and your home for default.

To cope with this growth, there are some alternatives you can consider. You can, for example, consider doing extra work to increase your income, invest in your training to find a better job, look for housing closer to the outskirts of the city, among other options.

Also read: First time buying a house? Know the challenges ahead

Not paying attention to the details of the house

One of the situations to be aware of is the quality and current state of housing. Sometimes, many homeowners choose to do works to just “beautify”, without making deep repairs that may be necessary. This means that you may be “buying a pig in a poke” without realizing it. Don’t be impressed by the details that “fill the eye” and focus on the important aspects: plumbing, roof wear, possible signs of infiltration, among others.

The works that cost the most money are the structural ones.s, which often do not change anything in the appearance of the house and, as such, are “undervalued”. For this reason, you should always ask the owner about this type of work, if they were ever done and what was done to solve the problem, invoices that he has kept, etc.

Also read: Are you going to buy a house to sell later? Find out how to value it

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