Want to know what the mortgage costs are?
How to understand which are the main cost items to take out a loan to purchase or renovate a property? Whoever makes the decision to buy a house, almost certainly must rely on the disbursement of a mortgage, an important decision that involves a considerable financial commitment. First of all, we must be aware that we will commit ourselves for a longer or shorter period in the periodic payment of installments for the repayment of the loaned capital. But not only: in the decision of the mortgage to be signed, it is necessary to consider the additional expenses that will have to be borne.
First of all, the most important cost item of a mortgage, like any loan, is the interest rate. This index measures the remuneration of the bank providing the loan and is expressed as a percentage of the capital received. The rate varies according to the contractual clauses (can be fixed or variable) and the characteristics of the loan: for example, a longer loan will require a higher rate.
The interest rate is indicated as TAN, the nominal annual rate. However, to best judge a mortgage, it is always preferable to refer to the APR, the annual percentage rate, which also counts all the ancillary costs necessary for the opening and management of the loan. And it is these expenses that must be carefully controlled. First of all, these include the preliminary and opening costs of the case. The preliminary expenses consist of all those costs that the bank faces in the preparation of the loan: from the income and asset checks on the documents of the applicant up to the expenses for the expert who will have to check the conditions of the property he intends to buy.
After this first phase, the expenses for insurance policies are also involved. Remember that the bank cannot impose the subscription of an obligatory policy as a necessary condition for the disbursement of the loan, if not for the outbreak and fire insurance. In any case, the insurance costs, if agreed in the contract, must be taken into consideration. There are also periodic costs related to the collection of the installments and any fees for the bank or intermediary that favored the disbursement of the loan.
To find out what are the costs of the loan, however, we must not limit ourselves to those calculated by the APR, because the rate does not consider it an important part: the notary fees. These depend on the characteristics of the contract, but are needed for the notary to sign the agreement.