Buy a flat always brings a variety of expenses, notary, registration, taxes, VAT or ITP who account for approximately 10% of the housing. In addition, banks often offer mortgage loans not more than 80% of the appraised value of the floor, so we would need a considerable amount of savings before buying a flat. This is not always possible. Some people need to finance 100% of the floor and more, also finance expenditure.
To do some organizations have created 120% mortgages, ie mortgages in which the bank will pay 120% of the appraised value of the floor. The truth is that few entities that offer and in all cases require that the count loan guarantees sufficient to cover the extra amount. Otherwise, in case of default, the bank would be checked as it could happen that the value of the apartment does not cover the debt.
Disadvantages
The main disadvantages are that these loans have higher fees and higher interest rate than other mortgage loans because the bank charges and the risk premium you’re supposed to Mortgages 120. Usually also require the recruitment of other banking products such as cards, pension plans or home insurance that ultimately add to the amount of our monthly fee.
Mortgage 120 in Spain is normally required for immigrants who want to buy a flat. It is a service that banks advertise but through a financial agent, such as an agent associated with a real estate company can be reached, provided this guarantee.
When mortgage loans had always been taken into account by banks to the floor, over time, increase its value increasing the guarantees for the bank. With the current housing crisis is not so clear that the story inexorably rise in value, so now 100% mortgages and 120% are more difficult to get a few years ago and, as we said, with higher costs.
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