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What is a repayment table or table of a mortgage loan?
An amortization table is a table in which all the monthly payments of the loan are related, breaking down which part corresponds to capital amortization and which part to the interest payment.
The repayment schedule in the Good Finance simulator is calculated using the French or constant installment system , which is the usual method of repayment of personal and mortgage loans in Spain. The French repayment system uses a formula that allows the loan holder to pay a fixed fee every month.
As the interest is calculated on the capital pending repayment, in the first life of the loan, the interest payment is very high and little capital is returned. With the passage of time, the payment of interest decreases and the return of capital increases.
How can I know what is the maximum monthly payment I can pay?
To simulate the maximum monthly installment that you must “allow” to pay for a loan, it is good that you do a simulation. Use a calculator or an excel sheet and make a simple division: your monthly net salary (the amount of your payroll) between 30% or 35%.
Although technically the maximum debt ratio is considered to be 40%, it is advised to exercise caution in favor of greater financial security.
Thus, if for example you have a monthly payroll of 1,400 USD, the fee should not exceed 500 USD.
Anyway, it is better not to have the money of the extra payments in this calculation, since there are always unforeseen expenses and it is also necessary to generate periodic savings that increases your liquidity position and provides you with financial security present and facing your withdrawal for retirement.
Other related questions:
- Indebtedness level
How can I calculate the maximum amount I can afford?
The maximum amount of mortgage loan that you can afford or will be granted by the bank will be the result of crossing 3 variables: interest rate, monthly installment and term.
- The interest rate commonly used by private credit analysis systems is usually a fixed rate of 4.50%.
- In the monthly fee section you must enter a maximum of 35% of your monthly net income.
- The total term allowed by banks is usually between 30 and 40 years, with the age limit of the youngest holder between 70 and 75 years.
A standard example would be: a monthly fee of 600 USD, with a total term of 35 years and interest rate 4.50%. For this case, the maximum mortgage amount is 147,900 USD.
To older, to know what home you can buy, in the reality of the mortgage market a limiting condition to the calculation of the amount that you could face is the purchase price of the home, as well as the appraised value of the same. Banks require that the buyer give as input of the minimum purchase 20%.
With the simulator, how can I know if it is convenient to reduce the term or the installment of my mortgage?
You may want to reduce the term of your mortgage if your debt ratio is low. An entity may offer you a standard 30 or 35 year mortgage even if you can repay the loan in a shorter term.
Therefore, regardless of the bank’s offer, you have to make your calculations, since the shorter the term of the mortgage, the less interest you will pay and before you have canceled this payment obligation.
As for the mortgage payment , you have to assess whether you are currently paying another or other personal loans or are going to need them for car acquisition or other personal or family care. In these situations, present or foreseeable in the future, it is advisable to reduce the monthly fee.
You have to be aware that even if you have the car paid, it may fail you or you may want to change cars within a few years of contracting the mortgage. Then you should choose to extend the application for the total term of the mortgage to the maximum allowed by the bank. This will allow you a better quality of life, financial tranquility, ability to save and manage your accounts with more slack.
How can I know online if they will grant me a mortgage and in which entity they will give me the best mortgage, with the best interests and conditions?
From our mortgage section, you can check online and for free if they will grant you the mortgage (in the green box on the right).
One of our advisors will inform you depending on your case (amount you request, monthly income, etc.) if a bank will grant you the mortgage and, filtering the results based on your profile, the cheapest mortgages will appear.
Other related questions:
- How can I know online if they will grant me a mortgage?
What expenses does a mortgage entail?
The Real Estate Credit Law , which entered into force in June 2019, establishes a distribution of the expenses involved in contracting a mortgage. They are distributed as follows:
The bank pays:
- I would notice
- Tax of Documented Legal Acts (IAJD)
- Your copy of the deed
And the customer pays:
- The appraisal of the property
- Your copy of the deed
How can I calculate the expenses that I will have to pay for the purchase of my home? And for change of mortgage?
You can calculate the expenses that will be generated if you change your mortgage in the mortgage subrogation expense simulator.
You can also calculate the expenses you will have when buying a home in the expense calculator for buying a home .
If I already have a mortgage loan, can I apply for another?
Yes, there is no limit on the number of loans that can be contracted, as long as you have repayment capacity and have no debts. Sometimes, it is more convenient to cancel the current loan early and formalize a new operation.
Will they grant a mortgage to two freelancers?
Yes, they can grant a mortgage to two freelancers. The first and most important step that must be taken before applying for the mortgage is to start saving in order to contribute 20% of the value of the home at the time of purchase, since it is much more difficult to get a mortgage that finances 100 % of 80% of this value.
Another step is to adjust the expenses, since the self-employed, must justify sufficient income so that the quota of the requested mortgage does not exceed 30/35% of the net of your income. It would also be advisable to include in the savings, the expenses.