As much as it is the dream of many people, buying your property may not be a simple task. The amount that needs to be accumulated to pay it in cash is too high for most buyers, and an alternative to this is to take out financing.

However with keyrenter houston, taking on financing is an action that requires a lot of responsibility. It is necessary to be aware that some values ​​related to financing go beyond the interest rate and the value of the installments.

We will show here some values ​​included in the financing and that many do not consider so that future buyer can plan correctly and so that the financing does not have surprises.

Interest Calculation

Anyone who thinks that the interest rate is solely responsible for the amount paid in installments during the financing is wrong. The buyer needs to ask their bank for the financing’s total effective cost, or CET. The CET corresponds to all fees, tariffs, taxes, and insurance charged to the financing applicant, and only with its value in hand is it possible to know the actual amount that must be disbursed.

Included in the CET is the TR or Referential Rate indexing the financed amount and the interest rate. Created in the early ’90s, it was used to control the hyperinflation that occurred at the time; today, it is used as an index of some investments and is also considered in calculating the interest rate of real estate financing. The good news is that since September 2017, the value of this rate has been at 0%.

Rates

When carrying out a financing agreement, the bank needs to carry out some activities for which fees are charged. Two of these rates are the Property Appraisal Rate and the Legal Appraisal Rate.

The Property Appraisal Fee corresponds to the amount paid to a specialist appointed by the bank to inspect the property. The purpose of the inspection is to verify if the value of the property corresponds to the actual market value and if there is any damage that harms its liquidity.

The Legal Assessment Fee is the fee charged by the bank to verify the documentation of the buyer, the seller, and the property itself, to prove the absence of any problem that makes it impossible to carry out this financing.

In addition to these two fees, the bank also charges an administration fee for services provided during the financing.

For more information, check keyrenter houston