When it comes to buying a house with a mortgage, you have to bear in mind that you have to pay a number of costs and taxes associated with the loan. That's why it's important to have savings before buying a house with bank financing. In this article, we'll explain everything you need to know about the costs and taxes you'll have to pay for your mortgage.
How much will you pay for the costs and taxes of the mortgage?
When you apply for a mortgage to buy a house, the bank will analyze your financial capacity to pay back the loan over the long term. To do this, it will have to consult the map of credit liabilities - the Banco de Portugal (BdP) blacklist.
If the bank guarantees that you have all the conditions to pay the mortgage and gives the green light to the process, it will start the procedures for granting the mortgage. It will then inform you of the costs of the loan and the associated taxes.
This figure is not arbitrary, it's up to the bank to calculate it. And the bank will take into account the characteristics of your home loan. In general, the costs and taxes are around 10% of the purchase price. You should therefore have this money saved. If you don't have that amount, there are a few ways to get it, as we explain here.
How do expenses and taxes work with mortgage loans?
Each bank will have its own expenses, so there may be some differences between banks on this point. In addition, taxes also vary according to the area of purchase (mainland/islands), purchase price and loan amount - which, as a rule, should be up to 90% of the property's purchase price.
Even so, in the majority of cases, this is how families find out about the expenses and taxes to be paid on the mortgage:
- You apply for a home loan after shopping around for different solutions, not least because “each bank has its own expenses and this is also something that should be compared between offers”, says Miguel Cabrita, who is responsible for home loans in Portugal;
- The bank carries out a feasibility study into granting a home loan, assessing the effort rate and checking the BdP's liability map;
- If the bank approves the mortgage application and you accept the offer, it will ask you for the money needed to pay the associated costs and taxes well in advance so that you don't run out of money during the process;
- The process of buying and selling the house is carried out, as is the granting of the mortgage loan;
- The bank collects the costs and taxes associated with the mortgage on the day of the deed;
- The bank informs you that the expenses and taxes have been paid. The client should check that the expenses and taxes have been paid and notify the bank. If there is any fault, the customer must notify the bank so that the situation can be rectified.
Who pays the costs and taxes of the mortgage?
The costs and taxes associated with the home loan are paid by the customer to the bank. In other words, it is up to the person interested in buying the house and who goes to the bank looking for financing through a home loan.
Source: idealistanews