Definitely owning a home is a goal that practically all of us have. At some point in our lives, especially when we are young, we always dream of having our ideal home, or at least having a place to live. Especially if we don’t have to pay rent to enjoy it. And traditionally they have sold us the idea that our house is the best possible investment. Or in one way or another, we have heard that real estate is an excellent investment. Of course they are, and I am not against investing in real estate; in fact, I bought my own house recently. However, we must bear in mind that there are really many costs that we do not imagine exist when it comes to owning a home. These costs also apply to when we talk about owning an apartment, or even a business premises, a warehouse and any type of property.
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Costs When Acquiring It.
By the time we are going to buy, the vast majority of people need a mortgage loan. To acquire this mortgage loan, the first thing we need is to go to the bank and have a study done. Some banks charge for the study, other banks do not charge for this. But if they charge it, it is the first expense we have to do. Assuming that the study is correct, that you have the sufficient credit profile and the necessary debt capacity, you will be able to take the house. But if not, it is likely that you will have to pay off debts first and that represents an expense that perhaps you were not thinking of doing. Or that you have to cancel credit cards and suddenly that also represents a disadvantage in other ways, as it happened to me.
Then we talk about what you do the business and then as such comes some expenses from closing the business:
- The down payment, which of course is part of the price of the house
- Registration fees
- Notary fees
- Mortgage registration
And everything that has to do with a certificate of tradition, and many expenses associated with the fact that the property is really in your name. Additionally, in the banks to be able to lend you money with your house, or apartment, or real property as collateral, the bank will want to make sure that the value that you borrow, really equals what you are buying.
The lawyer is in charge of analyzing that your property can really be bought, that it is not seized, that it is not in trouble, that if the bank needs to keep it as collateral because you do not pay or anything, it is not going to get tangled up and not are going to have problems.
Expenses When Having the House:
Once the house is ours, now everything depends on us.
If you have to install curtains, buy furniture, if what you had in the previous house is not enough to fill the spaces in this house, and suddenly there is a room where there is no television, or something like that … Those expenses also occur. They are very emotional, they depend on each person, but in general we do not take them into account and it is always an expense of these. Even at the time of finalizing your mortgage payment, you have to pay again to remove that mortgage from the notarial registry and set your house free . And guess who has to pay that expense. Once you have your mortgage credit, you will have to pay monthly interest, which can be deducted from your income statement, freeing you a bit in terms of tax deduction interest. However, obviously that is an expense that you may not have thought or calculated in the correct way, depending on your credit profile. There are people who go to one bank and offer them one rate, and then go to another and offer them a different one; And perhaps at the moment when all the laps are being made, the risk profile may decrease, or increase for example. What this means is that the value of the interest rate can go up, it can even go up according to inflation.
And the rate that is agreed in the long term could mean large expenses as such in interest. That’s why I always recommend building and strengthening a pretty solid credit history. Credits usually have other associated costs as well, such as insurance. In this case, life insurance, which in case you die, pays the debt to the bank and does not pass to your heirs. And also fire and earthquake insurance, which is the basic one, in the sense that if the house is destroyed by some type of accident or loss, the guarantee for the bank continues to be there.
Once again: it is a guarantee for the bank and we have to assume that expense.
So, you have to be very discerning when selecting an investment, and of course houses, properties, apartments in general; they depend on its location, its benefits, and many variables when it comes to selecting it, so practically over time, with experience and perhaps with expert advice, I realize when it makes sense and when it doesn’t.
