On the journey of acquiring a living place own, many Peruvians choose to apply for a mortgage loan to be able to finance their property. Buying a home is a monumental step in the lives of most citizens, but to ensure stability and avoid financial distress, it is essential to understand how much of our monthly income we should allocate to pay the monthly loan payment.
In the complex world of real estate, in which dreams of having a home collide with financial realities, the answer is crucial to not unbalance our personal finances. For this reason, La República interviewed Enrique Castellanos, professor of economics at the Universidad del Pacífico, to clarify this scenario for us.
How much of your salary should go to paying for your house so as not to go into debt?
When buying your home you should mainly consider what your income and expenses are, and how much you can allocate to pay the monthly payment of your mortgage loan. Enrique Castellanos recommends allocating 35% of your salary to pay for your house, taking as an example a salary of S/3,500.
“It will depend on your savings capacity. In general terms, you should try to make the initial payment. And in general, The monthly payment of that mortgage loan should be equal to or less than 35% of your net salary. That is, if you earn S/3,500, but in the end you only receive S/3,000 for the deductions, then your monthly payment should be S/1,000 maximum, you should not over-indebt. This in very general terms because it will depend on what you want to buy,” explains the specialist.
What factors influence the number of years you will be in debt?
The period of time chosen to pay the loan will depend on the monthly amount you are able to pay. Castellanos points out that perhaps a person can go into debt for 25 years so that the monthly payment goes down, “but if I take out a loan for 10 years, the payment will be much higher and perhaps I cannot pay it.”
In addition, our age also influences, at 30 years old one can acquire a debt for 25 years. Nevertheless, “If I am 50 or 55 years old, the bank will probably no longer lend me such a long term loanbecause I can stop working,” emphasizes the specialist.
How much down payment do banks usually ask for to provide a mortgage loan?
Banks do not usually finance 100% of the price of the home, but rather the interested person must assume a smaller percentage: the initial payment. The financial institution “will ask for between 15%, 20% or 25% of the value of the property, depending on the time,” Castellanos specifies.
If your down payment is high, it may give you the ability to get better monthly payments and a lower risk of over-borrowing, but it may require significant savings on the part of the buyer before being able to purchase the home.
Source: Larepublica
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