The majority of buyers who want to buy a home do not have enough money to be able to pay for it in cash and have to seek alternative financing to be able to make the purchase.
One of the most common ways to finance a property is through the application for a mortgage loan , but there are also some ways to buy a property without having to go to a bank.
Financing with mortgage loan
To choose financing with a mortgage loan, it is necessary to previously analyze the different types of existing mortgages in order to choose the one that best suits our needs.
A good option is to study the different banking offers and carry out a mortgage simulation on the different platforms, which are established both by the websites of the different banking entities and by some real estate agencies.
There are different mortgages depending on different factors, such as: according to the type of installment, according to the type of group to which it is directed, the type of property that is going to be financed or according to the interest rate.
Normally, the latter are the most common and it is where we find the fixed mortgage, the variable mortgage and the mixed mortgage.
Fixed mortgage: it has a fixed interest rate that will not vary throughout the mortgage loan, and therefore, if we choose this type of financing, we will know the installment that we are going to pay every month. It is a fairly suitable option in the event that you are going to buy a long-term home or with little chance of change.
Variable mortgage: in this case, the installment varies each time a review is carried out, which is usually semi-annual or annual, and the interest rate is taken into account plus the reference index, which is usually the Euribor, and depending on the economic moment is paid more or less. It is a mortgage indicated for homes that are acquired as an investment or that we have to sell for different reasons in a short period of time.
Mixed mortgage: in this case the mortgage has a fixed interest, which is usually during the first years of the mortgage, and then it will have a variable interest, with the Euribor reference index.
Other forms of alternative financing
Among the different forms of alternative financing that we can find to be able to acquire a home are:
Rent with option to buy
It is a solution both for potential owners who are unable to sell their property, as well as for those who have not been able to save enough to be able to pay the down payment on a flat or who have difficulties obtaining a mortgage.
The rent with option to buy has to be done through a contract, drawn up by a professional and before a notary, so that there are no problems once the rental time has elapsed.
In this case, the tenant and future buyer will be under a lease for the established period of time and will pay the installments, which can then be totally or partially deducted from the final amount of the purchase of the property.
Buy in installments
It is an option similar to rent with the option to buy, which consists of internal financing between the owner and the buyer, and in which a purchase contract must also be signed, where the total price of the property appears, the terms and the form of payment, as well as the amounts or penalties if there is any non-compliance.
If there is a family member who can finance the purchase of a property, they will have to do so through two options:
Through a donation, in which case the money does not have to be returned but its origin must be accredited before a notary by means of a public deed, indicating the amount of money to be lent and what it is going to be used for.
Through a loan between individuals, in this case the money will be returned, therefore, a contract will have to be signed in which the amount, the repayment terms and if there is interest are established.