Cheap housing credit? Best home mortgage loans Louisiana
Credit housing is a financial responsibility that will accompany you for much of your life. In that sense, getting the credit cheaper housing is important to keep managing your finances under control. But for that, you need to have a good knowledge of what you are going to hire.
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In this sense, nothing like starting with the “good-bye” of the terms that will find in the offer of housing credit. Do you know what TAN and APR are? How to influence the spread? And then you know: just compare the best offer and see which is the most competitive solution. At the end of the day, you can be saving (many) thousands of dollars.
How does the spread can lead to cheaper housing credit?
The spread is, roughly speaking, the profit that the bank earns on financing. It is, therefore, the variables most likely to be negotiated by the customer and this is where they can lower their performance. And do not think that this reduction is only possible at the beginning of the contract. No, you can at any time renegotiate your spread with the bank. And you can even transfer housing credit to a bank that offers better terms.
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But there are some “tricks” that you can apply to get your spread down:
Pay attention to Loan-To-Value: Normally, the bank finances up to 85% of the value of the house. This is called a Loan-To-Value. But the more you give in (and the less the bank has to fund), the more room to maneuver you have to negotiate the spread. Therefore, before asking for a loan to buy a house, you must add some money to give a “generous” entrance.
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To get a cheap housing credit it is important not to carry on your effort fee. This can be calculated using the following formula:
Effort Rate = (Financial Charges / Total Aggregate Net Income) x 100
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It refers to the percentage of household income that is directed to loans. A large percentage means that the incomes you get are few to cope with. And, normally, the bank does not “like” it. Therefore, to have a negotiating advantage, always keep this item under “check”.
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You can always associate some extra products. The bank can not oblige you to accept extra products to access housing credit, but you can “entice” it by offering to lower the spread by subscribing to some separate products.
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There is a date of concepts to retain when analyzing housing credit. First of all, it is important to retain the concept of the Annual Nominal Rate. This refers simply to the spread plus the variable index (the loan rate to which housing credit is associated).
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Annual Effective Annual Rate represents the cost of a loan, on an annual basis, based on the amount owed. In this rate are included several items, such as interest, commissions, life insurance and other expenses of the process. It is a good variable to get a general idea of the cost of the loan. Also, this fee takes into account the banking products to lower the spread and thus allows a more reliable compared with the offers of other banks.
Bonus Tip for a Cheaper house mortgage loan in Louisiana: Life Insurance
There is yet another way to cut the costs of home loans. With the enactment of Decree-Law no. 222/2009, it was established the possibility of the client being able to change insurers in any period of validity of the contract. As such, life insurance is no longer a permanent link.
So that at any moment you can change your insurance company under certain conditions, saving thousands of dollars in the process. But be aware that the bank may aggravate the spread if it does.
In this sense, it makes a lot of sense to know the offer of the housing credit market in the USA. Only this way can you get a cheaper housing credit and that meets your needs.