Already around here we have spoken several times that housing credit is back. Banks are increasingly eager to give credit to their customers and we already see many people switching banks to reduce the spread of their loans.
At this stage, the advantage of buying a home from banks is less and less advantageous when compared to other alternatives, which is not to say that it is not a great solution. In this article we will talk you some advantages of buying houses to banks.
The Interest on Your Home Loan May Be Lower
With the successive reduction of the interest rates ( spreads ) practiced by the banks, it is already possible to buy your house with very small monthly installments . In this context, spreads practiced on banks’ homes are usually slightly lower than market spreads. So, cases are interested may happen to be able to do your credit housing with spreads close to 1.25% in some banks.
Financing Equal or Greater than 100%
This is the great advantage of buying houses to banks. If to achieve spreads of 1.5% it is necessary to give an entrance of close to 20% of the valuation value , in the case of banks houses it is possible to have 100% financing (or more, which makes it possible to pay taxes and other associated costs the purchase). Unfortunately, this facility can carry the risk of making bad financial decisions. In fact, many people today regret buying their home, something they could have avoided if they had to make an entrance. Yes. Having to make an entrance is a good inhibitor, which requires us to think several times before making a decision.
Extended Term and Reduction of Commissions
Banks want to “dispatch” the houses they have on their balance sheets. In this way, they will create various facilities to make your decision faster (and less weighted). Thus, it is common to allow longer deadlines (which allows lower benefits) and the reduction of various committees, such as the opening commission or the evaluation committee.
This Option Has Disadvantages
When buying a home the bank is focusing on reducing interest rates (which are not, as we have seen, more appealing than the rates practiced in the market by some banks). This focus will lead you to disregard other factors of analysis that end up weighing heavily on your budget. In this context, we highlight two:
- The banks are not very open to negotiate the purchase price , which ends up giving the buyer a very large negotiating power that would make it possible to lower the cost of acquisition and consequently the value of the monthly installment;
- The lower spread does not translate into a lower APR. That is, all the associated costs and many other costs end up making your proposal very expensive. For example, many banks require you to underwrite home loan life insurance with your insurer which, as a rule, is much more expensive than alternative insurers (incidentally, we know of many cases where customers pay more for life insurance than for provision).
What to do?
If you are undecided as to what to do, why not use the mortgage simulator so as to get an idea of your monthly installment and the benefit you may have if you buy a home using a traditional housing loan? The best of all is that it does not have an associated cost so it does not take any risk ?