INVEST IN PROPERTIES AT HOME EQUITY REFINANCE

Buy a house, propery or apartment in bargain period: HOMEEQUITY.ES

Cuts at property Real Estate where housing already sold close to 40% discounts

For a decade, the words "bargain" and "property" were an equation unthinkable. Consumers, who have been watching the prices of the apartments amounted to unreachable limits helplessly, now attending the appearance of "bargains" in a sector they finally have come cheap. Developers and realtors trying to get rid of surplus sales floors at low prices and discounted advertising campaigns in a time of economic recession and crisis in the sector.

In times of crisis plays to tighten their belts, but also emerge quotes. That is what happened in the early '90s, when property auctions were the order of the day due to the implementation of delinquent loans. Today, the homes of delinquent amount to only 10% of the flats sold at auction, but this method of sale, in which special offers are still minority, is already catching on in a sector that is estimated to have an " stock "of 600,000 unsold homes. Some buyers have already begun to exploit this situation. But most expect, because they think prices will keep falling. Meanwhile, all Spain is suffering from the bursting of the housing bubble, although the upward trend in the Euribor, high interest rates and tightening of bank conditions also facilitate the conditions for those wishing to purchase a home.
New Homes in cities

Currently, due to the wide range of properties, large estate sales in the cities are as stated Pedro Medina, a technical expert real estate. And the examples support its claim. In Catalonia, the Employers Association of Corporate Real Estate (ACd'EI), created at the root of the crisis, offers 2,000 flats at cost, most of them near urban centers. This association provides housing between 120,000 and 180,000 euros, with discounts of up to 40%. Coastal areas with large new building developments are also being affected by the reductions. In Huelva, the prices of certain promotions are up to 40% lower than when it came out, and in some large cities can find discounts of up to 200,000 euros. Simply connect to any website on the Internet sale of flats to see how far the discounts, and note that the word "Reduced!" is the most repeated in most of the bids. Discounts are given mainly in the promotion, as the promoters have reduced their scope for not facing the mortgage to the completion of the work.

Discounts are given mainly in the promotion, as the promoters have reduced their scope for not facing the mortgage to the completion of the work. The earthquake in prices is affecting both new housing and to the use. In the case of newly built apartments, developers are being forced to make an offer to acquire money to pay mortgages. Second-hand homes are also noticing the fall, the owners of these flats they want to sell in the short term have no choice but to lower the price and provide maximum facilities to the few buyers.

Furthermore, the difficulty of selling at this time also made flower another phenomenon: it is increasingly easy to find in some posters that remain suspended for months the words "sale" and "rental" on a single floor.
New tactics to sell. But sales are stagnant and the sales, so far, do not seem to take effect. Meanwhile, the market is with demand expected to continue lowering prices to buy and with the restrictions on banks to grant mortgages, which continues to cause the loss of sales of flats. The latest data from the National Institute of Statistics show that new housing transactions have declined 27% in March, housing and used a 46%. This has caused real estate developers and develop new ways to try to sell the flats, and all of them pass by an improvement in prices. Thus, due to the large supply, the promotion is stagnating and is using advertising campaigns and sales promotions "low cost".

Some promoters use auctions in which individuals still have a minority presence. Others use the housing lottery system that are free in promotions, which offer apartments of different qualities about the rest of the promotion, at a lower price. Some real estate, as in Vitoria, have opted to use the bidding system "to the Netherlands, where people are making offers to the floor from an appraised value. And others provide housing with all the furniture including the kitchen, the gift of a parking space, furniture for free, or pay for one year mortgage without increasing the price.

Home Equity: Beware of mortgage bottom lines

Many mortgage loans have fixed a minimum rate of 3%, and not enjoy the crowded fall that accumulates Euribor. The family budget can breathe a little: one of the main enemies of many mortgaged homes, the Euribor, is poised to set new lows. In February this index, references to more than 90% of mortgages granted in Spain, closed at 2.135%. But in some sessions, has even dropped below 2%, which anticipates new kicks for the coming months. In theory, the fall of Euribor benefit the many families mortgaged to review soon the interest rate on their loans. In principle, it could be paying more than 5% to pay 2.5% on average. But beware! for the joy can be overshadowed by a new enemy of savings, unexpected, unknown and evil: the "ground" mortgage.

Financial institutions included in many of its loans for home purchases this concept, called "bottom line", a minimum interest rate to be applied regardless of the actual level of the index. There are examples of banks and to place these "soils" in 3%, which means that the client may not receive all the cheaper mortgage that would correspond, judging by the downward trajectory of the Euribor. And if the index continues to fall, as expected to happen, not all mortgage could enjoy all the fall of this reference. As explained by General manager of Ciampi Group, Jose A Lopez-Esteras Camacho. "Now  are working with a number of clients that have found this unexpected problems, as well as other highly complicated products called CLIPS and SWAPS that were sold as "fixed interest mortgages".  In 2008 we knew nothing about them, now, in 2010, "we unfortunately have become real experts in these complicated products"

But Is it legal? The "ground" mortgage is a concept that includes some loans, not all, to finance housing. Indicates the minimum level of final interest rate, coupled differential Euribor and relevant, to be paid by the client, whatever the level at which the index is at the time of the review. For example, a mortgage signed to Euribor plus 0.50% if the customer review its type in the month of February next year (or the next six months, according to his contract) would pay a final rate of 2.635 %. This type results from adding to the Euribor (2.135% at the end of February) the applied differential of 0.50%. However, if the mortgage has a floor of 3%, the user is obliged to pay their assessed contributions in making this reference. That is, will be paying a 0.365% higher than it should pay if he had no ground.

Families to review their mortgage with the rate applied in February will notice a savings on their assessments of about 145 euros per month and 1,740 per year (taking an average mortgage of 150,000 euros to 25 years). However, if you have a floor set at 3%, the savings in fees will be 134 euros per month, 11 euros less per month than if the loan had no minimum limit. The "soil" and "ceilings" mortgage should be reflected in the writing of the loan, otherwise the organization may not apply. But this clause is not new, as any loan variable interest rate may include such conditions. Its history goes back even to the MIBOR linked loans, which was the main reference of variable rate mortgages which was used until the birth of the Euribor, in 1998.

The "ground" mortgage is, therefore, a legal status and permitted, as are the "roofs" mortgage, ie, the maximum rates that can be paid at a variable interest mortgage. In any case, for the institution to act according to good banking practices, floors and ceilings reflected mortgage must come in writing the loan. If not there expressed and well described, although they were in the sales brochure of the product, the entity may apply. Before a mortgage should ask, therefore, if you have floor and ceiling on interest rates. All those who already have signed a mortgage loan, must be consulted in the writing of it, under the heading "Interest rates, if they have or not to floor and ceiling. Sometimes it is possible that your body itself these clauses apply to them, despite their ignorance. Ciampi Group shows us some tips:

* Before a mortgage, it should ask if you have floor and ceiling to be prevented.
* Given the choice, it is best to choose a mortgage with no ground to allow all to benefit from cheaper Euribor possible that is expected to continue falling and lowering monthly payments.
* If the soil is set at 3%, should seek a new mortgage, and that should be allowed to pay less than 2.5% (Euribor to fall below 2%).
* If already has a loan, look under "Interest rates" of his writing to see if your institution can apply or not mortgage land.
* Many mortgages also have roofs, beneficial to the user as if a spectacular rise in the Euribor, it sets limits on the interest rate. However, these limits are often very high and, in principle, unattainable.

Loans and Home Equity: What I have to know about mortgage lending

Mortgage loans are the type of credit normally go to when buying a home. The security required in these cases is the home itself acquired. Mortgages generally carry a lower interest rate than personal loans, and repayment terms are much longer, usually 15, 20 or 30 years. It is usual to give you about 80% of the appraised value of the house. Because of its importance in the household economy and its long term, a mortgage loan is a decision that must be taken with care. Therefore, you should know:

1. The requirements to establish a mortgage
2. The documents required to process a mortgage loan
3. The 10 key points when a mortgage loan

1. Requirements to get a mortgage

* The mortgage loan is one that gives you a credit with the assurance that you acquire the property itself.
* To achieve this you must meet the following requirements:
* The mortgage must be provided in a public deed before a notary.
* The property must be registered with the Land Registry on behalf of the mortgagor future. In the case of simultaneous buying and mortgages can register at the time of both formalized.
* In principle, the farm must be free of charge, ie without previous mortgages. The legislation allows "rehipotecar" a farm, but financial institutions do not usually do because the first is always more important guarantee for the latter.
* To be effective, the mortgage must be registered with the Land Registry.

2. Documents you need to apply for a mortgage:

* ID
* Property Deed
* Certificate of Registration
* Last receipt of Property Tax
* Last receipt of the owners
* Certificate of home insurance
* Your last two tax returns
* Your last two payslips if you work as an employee. In the case of self-employment, you must submit additional documentation about your career

3. The ten key points when a mortgage. When a mortgage loan for you to consider these ten points:

1. How much will you pay? It all depends: Amount of housing that is valued. This value gives an appraisal company contracted person or, as usual, by the very financial institution. The bank usually on loan to grant about 80% of the appraised value (sometimes up to 100% grants with other additional safeguards, such as having the backing of guarantors). Of your income. Financial institutions are finding that the monthly fee for which the owner can borrow is between 30% and 35% of its total net income.

2. What type of mortgage lender provides you with your personal circumstances? Variable rate mortgage or mixed. In this type of loan, the interest rate is reviewed annually or semiannually, so the monthly fee is set each year or semester to market trends, according to a certain benchmark. So at the beginning you will be subject to payment of an initial interest for six months or a year. After you pay more or less depending on the evolution of the benchmark index plus a spread between an unbeatable 0.4% which can be found on the Internet and 1.25% for the worst deals. In this case, the term of the loan is fixed and will always keep your monthly payments will vary periodically. Fixed-rate mortgage: In this case, the interest rate and monthly payments remain fixed throughout the life of the loan. Therefore, the total time is also unchanged.

3. What interest rate will apply to your loan lender? Banks tend to apply for mortgage loans fixed interest loans greater than for variable-rate mortgage. As fewer and fewer entities that make loans fixed, we will focus on the variable rate mortgage or mixed. The benchmarks for mortgage loans are published in the Official Gazette every month. The major indexes are:

# Type half of the mortgage loans over three years for house purchase free: IRPH of banks: is the average interest rate of mortgage loans over three years that banks have been granted during that month for house purchase free and expressed in the Annual Percentage Rate (APR) which expresses the actual cost of the loan.
# IRPH boxes: same as above, only reflects the average rates of the contracts awarded by the savings banks.
# IRPH of all credit institutions: benchmark for mortgage loans of all banks.
# MIBOR to a year: interbank market rate. Is the average price or interest rate at which banks lend money and cash in the money market.
# EURIBOR: one year interbank reference. Single European type promoted by the European Banking Federation is formed from a panel of fifty entities.
# ECSC reference rate of savings.

Our recommendation is to always sign a variable rate, indexed to EURIBOR, as historically has always been better than any alternative. Financial institutions often recommend additional or differential IRPH without ECSC, but that will only benefit them. For example, in January 2002 the rates were:

EURIBOR:% 3.483
ECSC: 6.000%

Beware of commitment fees, since in practice amount to a higher interest rate the first year. That is, the same 4% the first year with a fee of 1%, 3.5% interest with a fee of 1.5%. It is recommended that you first go to the financial institution where you have known as a client and a reference from your financial situation, to be domiciled payroll, for example. You compare the offer you make (binding offer in writing and linking them by 10 working days) to those of other entities. Institutions must be sought in the town recently introduced, as it seeks to attract new customers so they are more flexible in negotiating the terms.

4. How long do I have to repay the loan? The period of redemption or repayment of the loan ranges from 10 to 30 years. Logically, the higher the repayment period the lower the monthly fee, but greater is the amount you pay interest. So you have to find a period that does not involve you a monthly charge, is as short as possible. Note that if the term exceeds 20 years, reduced the monthly fee is so small it probably will not offset the increased interest generated by such a long payback period.

5. What fees will I have to pay? Generally apply the commission and the cancellation fee. Arrangement fee: usually does not exceed 1%. A practical purposes as an increase in the interest rate the first year. Commission for early cancellation: if you want to cancel the loan early, when it is a variable interest, the commission does not exceed 1%. In the case of fixed rate may be 3%. Accelerated depreciation charges for the loan depend on the amounts to be amortized and the period expired and the loan. Typically agree individual credit institutions.

6. Beware of euros and % figures! Some financial institutions have the bad practice of rounding the interest rate set at each revision to the eighth quarter-point or higher, which is equivalent to increasing the interest rate. If for example your mortgage loan has an interest of 14.501% reference, the bank might charge the 4.750%. This abusive practice has already been convicted in courts of justice, so we recommend you require the bank to remove it from the loan contract.

7. Novation and subrogation of mortgage loans. Significant changes have taken place in the credit market in recent years, with substantial reduction in interest rates, have meant that people who had contracted a loan may find that the interest you are paying is much higher than that currently on the market. In this case it is possible to negotiate a lowering of interest with the financial institution (novation) or to transfer to another institution offering better conditions (subrogation). These operations are regulated by Law 2 / 1994 of March 30 on Subrogation and Amendment of mortgage loans. The rule sets 1% as a maximum fee for cancellation of a variable rate loan (for fixed rate was not limited to) although the Bank of Spain accepts the limit of 2.5%. In addition to these percentages, the subrogation and novation transactions are considered exempt from Stamp Duty tax, and reducing the notary and registration costs 50% of their tariffs.

8. What if the house is already mortgaged? If you buy your home is already mortgaged (quite common in homes of second-hand), you have following alternatives: Staying with the mortgage as it is formed, which is called subrogation. Negotiate with your bank or a change in the conditions of the initial mortgage, which is known for innovation. Change of entity, which also is called subrogation. In this case, you will pay the cancellation fee to the bank or to withdraw the initial mortgage.

9. Use the APR to compare offers. The APR or Annual Percentage Rate is the annual real cost of the loan. For calculation takes into account not only the initial interest rate benchmark, but also any reviews and the various commissions that apply. It is the most significant of a mortgage, so before you decide one way or another entity, it is important that you have calculated the TAE-calculated for the same periods and amounts, a good number of them. Once you've collected bids from several entities, it is advised to obtain a simulation of the loan, ie, what is the monthly fee you can go to pay and what the APR is that loan.

10. How much will I pay for the mortgage?  Once the decision on the amount, repayment period and the entity, you still take into account the costs you will entail. Almost all financial institutions have information leaflets on the loans they can apply. In them, besides showing the loans offered, approximate cost tables are formalized loan and tax benefits to which you can host. Among the expenses note:

1. Expenditure preliminary to the operation:

* Check the registration status of the property
* Pricing housing

2. Costs of formalization of the mortgage:

* Property Insurance
* Notary Fees
* Tariffs registration
* Taxes
* Management and transaction costs (voluntary)