Month: May 2019

Tips for taking out a mortgage loan if you live in Argentina

by Clint Cox

A mortgage loan is not the same as a mortgage, they are often confused, but they have a big difference and it is that the home equity loan serves to obtain money by putting your home as collateral, in case of default, you lose your home. In the case of the mortgage, it is a debt that we contract with the bank to pay your new house in installments.

If what we need is to apply for a mortgage loan because we need a significant amount of money, read on below.

What advice to follow to take out your mortgage loan?

What advice to follow to take out your mortgage loan?

It is important to know a series of issues that we should pay attention to when we are going to take out a mortgage loan. Each particular case is different and if we value our letters well we can facilitate the process a lot. Another important point that we must keep in mind before applying for our loan is that we have a previous savings deposit to be able to deal more easily with the purchase of our house.

1. Rate the contract

One of the most important and decisive steps of taking out your mortgage loan is the signing of the contract. It is very important to review the contract clauses well. Something very advisable is to ask for a copy of the contract and review it patiently at home or perhaps asking for help from an advisor. It is necessary to read the entire contract very well, including the fine print and not leave information for granted.

Some important clauses would be:

  • The cases of default

  • insurance and other products associated with your mortgage loan

  • permitted uses of the property

  • or cost of early cancellation.

2. Evaluate the type of insurance

Most mortgage loan contracts usually carry associated expenses for other types of products such as insurance, and usually are. There are different types: home insurance, life insurance, theft or fire insurance ... etc. It is advisable to assess well what are the conditions of these products since choosing well you can save some pesos.

3. Total financial cost and the initial fee rate

financial cost

On the whole it is essential to review the Total Financial Cost of the purchase of the real estate, but the initial fee rate is also important since this type of added expenses can greatly influence the amount of our fees. Such as administrative expenses, reporting and granting, etc.

4. Consider the expenses of writing

The clerk's expenses can be an important percentage of the total loan expense. Since this expense runs from the buyer's account it is advisable to take into account who you hire for this purpose and their fees.

5. Think long term

We must think in the long term, when we contract a mortgage loan we must take into account that at least 10 years are in which we have to take care of this expense. On the one hand inflation and financial-political instability generate a distrust in the market, however, in general the payment of a mortgage is usually more affordable than the payment of a rent , so by valuing all these tips well we can get some Beneficial conditions for our situation, compared to a rental. On the other hand, UVA credits give us the opportunity to pay fees according to the state of the market, so we must take advantage of this opportunity when it suits us.

6. Required documentation and requirements

mortgage loan

When hiring a mortgage loan, another of the fundamental steps is to provide the necessary documentation and meet all the requirements for the loan application to be effective.

As for the mortgage loan requirements, they are usually the following:

  • Submit Argentine ID

  • Be between 21 and 55 years old

  • Last payroll receipts

  • Certificate of employment

  • Summaries of current credit or debit card

  • Certificate 

  • Marital status of the applicant

  • Finally: photocopy of the title of the property and proof of the real estate tax showing the cadastral value.

It is important to have the time in which you will get the issuance of these documents so that they are finally on time when applying for your mortgage loan. If you cannot gather them, it is better that you do not show up for the prequalification of your home.

Consumer Loans Benefits Which Will Be Better?

by Clint Cox
When taking out a consumer loan, it is worthwhile to precede this activity with a reliable analysis of its costs. In addition to the APY indicator, Wibor is also crucial. Under this mysterious concept, there is a reference rate on the basis of which banks set the interest rate. Wibor 3m or 6m - which is better? The banking market is governed by a complex system of laws and mechanisms. Although many of them may seem quite complex and complicated, it is worth being aware of the basics. This will allow not only to better understand, for example, the credit sector and its functioning, but also be better prepared in the face of incurring this obligation. Consumer loans are benefits that, in addition to the actual amount of money borrowed, contain a standard fee dimension. Their type, way of calculating, the amount and frequency of collection is legally regulated, but not all concepts enjoy widespread recognition. Interest - this concept seems to be clear. Similarly with a commission that functions not only in the sphere of the financial world. However, when talking about APY or WIBOR - many consumers may face a problem deciphering these terms. Today we will focus on characterizing this second concept. So what is a vibration? The term Wibor is an abbreviation of Warsaw Interbank Offered Rate. This is a unique indicator for the Polish financial market, by means of which the reference interest rate of all loans granted in our country is determined. In other words, the height of the Wibor parameter shows the maximum percentage at which banks are willing to lend money among themselves. Such transactions occur regularly, mainly of course between larger and smaller entities.

What is the significance of the consumer?

What is the significance of Wibor for the consumer? If Wibor is an indicator concerning mainly internal processes in the banking market, what is its significance for people taking out consumer loans? Well, consumer loans are most often loans taken in zlotys with a variable interest rate. The amount of the variable interest rate is not fixed rigidly. Sometimes it happens that banks offer customers the option of choosing Wibor rates in two tariffs - three-month or six-month. Usually, however, most of the outlets stop at offering either one or the other. And here comes the concept of a vibrator, which in the context of the interest rates of many bank customers has already met in the form of "3M vibrator" or "Vibor 6m". When comparing the two types of vibrations appearing in the context of taking out a loan, the period of interest rate update must obviously be taken into account at the beginning. In the case of 3m vibrations, it happens every three months, and in the case of 6m vibrations - every six months. Considering these different times of updating the rate - which will be a better choice? Everything depends on changes on the financial market related to interest rates. If their value drops at a given moment, then the vibration 3m will be safer. This is due to the fact that it is updated more frequently, which reduces the interest costs of the given mortgage. It is an advantage that comes from borrowing with variable interest rates. However, if the time comes for the market to increase the interest rate on loans - then, the situation changes by 180 degrees. Then the 6m vibration is the more optimal choice, because it changes less often. This allows you to keep the loan costs at the current level until the update, which may sometimes come after the "calming down" of the situation. As a result, the 6m vibration can allow you to wait out the unfavorable economic climate.

Wibor 3m or 6m - it never has a golden mean

Wibor 3m or 6m The global financial crisis of the end of the last decade has shown that the financial market is far from stable today. Therefore, forecasting long-range forecasts is usually pointless, as it is difficult to predict accurate behavior, for example in the interest rate sector in a few dozen years or so. This time dimension is not accidental here. Most consumers take loans for many years, paying off in many installments. This means, therefore, that the chances for extreme fluctuations in the financial market to pass interest rates are more than likely. In other words - during mortgage loans it is difficult to expect that the choice of the 3m or 6m parameter would bring continuous benefits. At the moment, they can be noticeable, but not much later - the customer may lose. The issue of choosing the vibrator parameter should be based on a response to the current situation on the financial market. Currently, for example, the vibrator drops, so the 3m parameter will be better. However, there are many economists' opinions that the financial market may break down in the near future. Then, the situation may be reversed. So there is no golden mean. It remains cool calculation, adequate risk assessment, consult a competent adviser and luck.