How to choose a suitable mortgage maturity period

The maturity date of the mortgage voucher is agreed between the client and the bank and badly at his will, which one he chooses. The choice of maturity is not fixed in the case of a bottom mortgage. Nabdka banka bv from 5 to 30 years.

Short maturity usually does not make sense, because msn installments would be too high. It didn’t make sense for a long time, because if someone drank at the age of 30, they would pay almost and in retirement.

The longest maturity, which is reasonably justified, is 20 years. At this maturity we have a very low installment and if the fulfillment of the bond is not extended. The Bank imposes a condition that it be repaid in the client’s working age. As soon as the client retires, his income will fall and he will not be able to pay the mortgage payments. The pension amount is limited for some clients when choosing the maturity period.

years rate

The rate is agreed between the bank and the client before concluding the transaction. In most cases, the agreed rate is an individual matter, when the bank offers a certain rate and the client either accepts or does not accept. The offer of annual rates depends mainly on the following factors:

years of market rates. Year rates from hypotench vr are affected by year bond rates, because first bonds are a source of pensions for banks. Wrong so on how expensive or cheap mortgage bank sources to buy.

Client quality. The bank prefers (and cheaper) to clients who have large, stable and in the future certain incomes, low installments and a large value of the balance against your mortgage bank. A client who has a low (see installment) or unstable income is risky for the bank. Due to the risk, the bank offers the client a one-year rate. Quality depends on life insurance. Sometimes it is valued at the annual rate.

Maturity period of the mortgage. A long maturity period means a risk for the bank, because it is time for anything on the part of the client to change. Venture trade, of course, has a higher annual rate.

Fi xace time. years rate depends on how long it will be fixed and for how long it will change. If we have a short period of time, we will have a one-year rate. If we want for a long time m xace and to be sure, we have to pay extra. We will have an annual rate. This logic also follows from the properties of the capital market and its input curve. Bonds with long maturities have yields than bonds with shorter maturities. Exactly the same logic is to ask the bank to years of rates, incl.

Competitive prostot hypotench bank. The competitive environment between banks has pushed down years of rates.

Type of product. Banks do not have a single mortgage product. Their offer is varied and the individual products differ in price (annual rate). Banks offer e.g. hypoten vry up to 70% of property value and vry up to 100% of property value. Loans that are better off are less risky for the bank, so they can offer a one-year rate. Banks thus offer vry that are fulfilled classically (annuity) or progressive. For progressive fulfillment gradually
growing raft vru. This progressive fulfillment has a different price (it will be expensive).

New client or exit ace xace. The Bank will offer me a different annual rate for a new client or for a client whose period has expired and who continues to meet. The bank must try to appease the new client, so give it an interesting annual rate. The client who has fulfilled the day, his period has expired and decides what length, you will receive the rate. Most clients do not want to have labor and costs with the transition to another banking state, so they prefer to agree to the proposed rate. The procedure of banks is similar to the case of the sale of credit cards, where you offer the first year for free. Or mobile operators try to attract clients to interesting offers, which are limited in time.

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In the middle of the year rates are changing, and therefore the year rates are strongly offered to clients in individual periods. Nap. Clients who took out mortgages a year ago have a completely different annual rate than clients from this year.
Even if the client is familiar with the current offer of years of rates, in most cases he can not yet anticipate what rate the bank will offer him. The offer depends on how long or bad the client will appear to the bank and how to assess his
ability to meet incl.

Splcen hypotenho vru is a bond for a very long time, often for 20 years. It would be risky for both the bank and the client to commit to advance tax rates for such a long time. If the thorn years rates fell after a certain time and the years rate from the boom would be still high, the client would linger10. If the situation were clear, the bank would be late. To avoid this risk, the annual rate is agreed upon for a fixed period.

Most often it is in 5 years, but in the banks’ offers there is another period of validity of a fixed rate. After this period, the client can first repay the full or wall and the rate is set for another year. What rate will the bank offer? Such as will be in the market at the time. If the rate changes over the years, we must repay the first mortgage. This freedom and the competitive environment between banks does not allow us to set a significantly higher annual rate than the market.

ryvek from the book: Own financing living

1. dl: Njem, or own lived on vr?
2. dl: Is it worth buying real estate from your own?
Step 3: Building a connection: how to get the most out of it
4. dl: How for the next year at the built spoen
5. dl: When you have a claim on a building society
6. dl: Under what conditions does the building society pj

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ryvek is from the book
“Financially own housing”
vydan nakladatelstvm
City Publishing,
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