With a view to completing the analysis of the European Standardized Information Sheet for Housing Credit , we will now turn to the last items in this document. In the last articles on the subject we focus our attention on the nominal and effective interest rate without leaving out the revised annual effective rate and also the introductory aspects. http://timtesisat.com/do-it-yourself-credit-repair-its-not-for-everybody/ fleshes this out
Today we will identify conclusive aspects of the Information Sheet, such as amount, duration, number and periodicity of the services, additional costs and early repayment.
Amount, Duration, Number and Periodicity of Installations
Here there is no great difficulty in understanding the information returned in these fields, since in our initial article on simulating housing credit we have identified the elements necessary to carry out a credit simulation.
The amount is in accordance with the conditions under which you negotiated the acquisition, works or construction of your dwelling. In the case of acquisition, the contract of purchase and sale is the document that clearly identifies the acquisition value, however, in the case of construction or works, the budget will be the best document.
The duration of the loan should be in accordance with your financial capacity, so you should first check the maximum amount of the benefit you can afford taking into account all the charges and expenses you have in your family budget.
Determine a Security Value for the Rendering of Your Mortgage
Determining a security value for the provision is critical. Thus, you can establish a withdrawal period that will return the term indicated for your housing credit.
If for example a benefit of 600 euros is framed in its monthly effort and for this benefit has a loan duration of 30 years, it does not make sense to hire a housing loan for 40 years and bear a benefit of 500 euros, costs in terms of interest paid.
The difference between a 30-year loan and a 40-year loan in terms of total interest is approximately EUR 30 000 for an amount of EUR 140 000 at an interest rate of 3%. As a general rule, the periodicity of the benefits is monthly and this periodicity determines the number of benefits that will have to be returned to the bank. It is possible to change the periodicity of the installments for quarterly, half-yearly or annual installments, however, it is not very usual for banks to accept this type of periodicity.
Additional Costs and Early Refund
The additional costs identify the costs of the funding request and are clearly represented in this field. It is an item that should be compared to other home mortgage simulations, comparing the recurring and non-recurring costs of home loan. The recurring costs are those that will be verified throughout the credit, such as insurance premiums or processing commission.
The costs not incurred are the charges for the application, formalization and contracting of the credit, such as opening and dossier commissions, etc.
The early repayment is legislated by Decree-Law no. 192/2009 which stipulates 0.5% on the amortized capital if the loan is a variable rate and 2% if the loan is a fixed rate, however, the decree does not provide for the amount of this reimbursement, while the banks have the ability to set minimum amortization amounts that may prevent them from paying the housing loan earlier.