As we told you in a previous article, in Peru there are more than 30 financial institutions that provide mortgage loans. If you already have a pre-approval of more than one of them (ideal scenario!), Or you are looking for the best mortgage loan with us, it is time to start discarding options until you reach the best option.
Buying a home represents an important expense and finding the best mortgage loan will help you save a lot of money and bad times.
Best Mortgage Loan Tips
Each financial institution offers mortgage loans with different characteristics, here are some tips that will help you know what you should compare to find the best mortgage loan.
Make sure you have several options
First of all you should have several options of mortgage loans, from different financial institutions, based on your profile. Not sure how to get them? We tell you how to ask for a mortgage loan in this article. If you don’t have several options, you won’t have much to choose from, right?
Compare interest rates
It is one of the most important factors to consider, however it should not be the only selection criteria. The interest rate tells you how much it will cost you to receive the loan to buy your home. In Peru, two concepts related to the interest rate are handled: the TEA and the TCEA. The TEA (annual effective rate) represents the interest charged by the financial entity, and the TCEA (annual effective cost rate) represents the interest (TEA) plus other additional expenses that you would have to pay.
So, you better compare the TCEA of each mortgage loan option. This will give you an exact idea of what the loan will cost you, including interest and other expenses, such as insurance and real estate insurance.
Compare the rates for lien insurance and property insurance
These insurances are part of the expenses of a mortgage loan and their values also vary between financial entities. Both are contemplated within the TCEA.
Good Credit Tip:
If you already have life insurance, you can endorse it to your mortgage credit so as not to pay again for one. This way you will avoid incurring an unnecessary expense. Endorsing a policy has a fixed cost, is paid only once, and will vary depending on the financial entity. Read more about this topic here.
What is the payment term you need?
Do you already know how many years do you want to ask for the mortgage loan? Some financial institutions only in the short and medium term, such as 5 – 10 years. Other entities lend to 20 years, and there are even a few that are already lending to 30 years. Then consider this feature, you can fit your payment plans.
Good Credit Tip: While it is true that taking a loan on a shorter term will make your installments to be higher, in the long run you will pay less interest on a longer term loan.
Consider other expenses and commissions
For example, some banks will charge you a commission for changing the term or currency of your loan. In addition, as part of the process to apply for a mortgage loan, a title study is carried out, some banks will charge you a commission for this study. As well as these expenses, each entity may have other extra costs that are necessary to know.
Experiences of friends and family.
Finally, it is very important to know the ease with which you can communicate with the financial institution. You will not know this until you have chosen a mortgage loan, but you can ask friends and family about their experiences acquiring mortgage loans with the entities you are considering.
The comments they give you will help you glimpse which entities work harder to answer questions and help mortgage loan clients. Beyond the number of offices that an entity may have, verify the ease of contacting the corresponding area by mail or telephone, and above all validates the speed with which they usually respond.