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10 Mistakes to Avoid Before Buying a Home

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10 Mistakes to Avoid Before Buying a Home

Often overlooked are the details that are critical to getting a good deal. CNN Portugal listened to a real estate specialist, a lawyer from the DECO financial office and a person in charge of home loans, and explained what you can not do when you want to buy a property

Despite the war, the increase in interest rates and the forecasts of the Bank of Portugal, the real estate market continues to grow. Only in the first three months of the year housing prices in the country grew by 12.9%. Including investments, who wants to buy a houseexperts warn, it is necessary to pay attention to the details that can be decisive for closing a profitable deal.

CNN Portugal spoke with Massimo Forte, Real Estate Specialist, Elisabeth Policarpo, Lawyer at Deco Financial Protection Authority, and João Melo, Head of Home Lending at ComparaJá, who explain mistakes to avoid and details to be aware of. , and steps you can’t ignore.

Give an unrealistic estimate

When buying a home, there’s a first step that needs to be taken safely, warns Deco lawyer Elisabeth Policarpo: determining the weight the purchase will carry on the family budget. First of all, he says, anyone who wants to buy a property cannot “forget that a home loan is a long-term one and will accompany you through the different stages of life.”

Therefore, one of the mistakes is not to give a realistic assessment from the very beginning. To do this, it is necessary to analyze several factors, the specialist points out. “The type of income that exists, whether fixed or variable, the commitments already made, the estimate of the level of effort, the need for liquidity to match the original value, the signal (which must be taken by the consumer in order to formalize the bill of sale) is not always properly taken into account by the buyer” he warns.

On the other hand, it is important to understand the interest rates of the banks and determine the benchmark of the cost you can pay to find a home. However, Deco’s lawyer emphasizes, “it is important to bear in mind that the cost of financing will depend on the value of the property valuation carried out by the banking institution.”

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Ignore some costs

The truth is that in addition to the monthly mortgage payment (including the cost of life insurance and multi-risk insurance), there are many other significant costs associated with buying a property. Real Estate Market Specialist Massimo Forte reminds you to take into account the costs of registration, documents, banking and process valuation, as well as the municipal burdensome transfer tax (IMT), a mandatory expense when buying a house.

No money to enter

“Since 2018, no banking institution has been able to finance more than 90% of the cost of a property acquisition or appraisal transaction,” notes Deco lawyer Elizabeth Policarpo, explaining that this means anyone who wants to buy a home to make sure they own them, for example, sufficient amounts for the so-called “advance payment”.

In addition, he states that by not financing 100% of the property’s appraised value, the consumer will receive no more than 90% of the value of the act of purchase (or the property’s appraisal), meaning that buyers must keep the difference.

Forget about the rate of effort

Any purchase involves an analysis of the family budget, but in the case of real estate, it is important to always take into account the so-called Effort Rate. That is, the ratio between a household’s net monthly income and its expenses.

In the case of a bank loan, this rate must be calculated based on the household income and the contributions to be paid to the bank. Lawyer Decaux points out the simple calculations that need to be done to determine this value: effort rate = [total de prestações / rendimento do agregado familiar] x 100). “The effort factor should be less than 35%,” warns Elisabeth Policarpo.

Value the spread more than the APR

The ability to analyze various indicators can be crucial in determining the payment amount when applying for a bank loan. According to Joao Melo, responsible for home loans in CompareJa, a company that imitates a bank loan, it is important to pay attention not only to the spread – the rate that the bank charges the client to cover the expenses that he had and make a profit with the loan – but also to the annual interest rate. “This is an important percentage in loan offers,” he says.

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Explaining that the annual interest rate “includes not only the cost of the spread, but also all costs inherent in the loan, such as life insurance and multi-risk insurance”, João Melo ensures that it is the value of the annual interest rate that “translates whether we face we are with a good or bad suggestion”. Therefore, it is good to have no doubt that “one of the most common mistakes is to ignore the annual interest rate in favor of the spread, since it is a more well-known term and with more disclosure by banks.”

Without assessing in detail the condition of the house

Another of the most common mistakes to avoid is not visiting a property to see what condition the property is in. Massimo Forte, a specialist in the real estate market, ensures that it is necessary to “visit the property in person” to avoid surprises. And even leaves a proposal: on one of the visits, accompany a professional builder, engineer or architect to sort out the details that elude most people.

On the other hand, this appraisal can help you get a real assessment of the condition of the property and understand the possible costs. At the same time, some elements arising from the condition of the property can be used to make negotiations more profitable.

Depreciate real estate area

When you’re looking to buy a home, it’s important to know the area you’re in. Therefore, Massimo Forte advises, in addition to exploring the interior of the object, to walk along the streets of the area in which it is located. “You always need to walk around the territory, talk with neighbors,” he suggests.

Another tip: visit the area and the property at different times, because there are details that are only revealed during the day, such as the need for renovation, and others that are more noticeable at night, such as noise.

there are missing documents

If you are sure that you have found a “home”, you must urgently request all documents for the property. According to experts, there are documents that people sometimes forget to ask for, but they are necessary for business: a cadastral book, a certificate from the registry office and a license to use. After that, it is also advisable to check that everything is within legal limits with a professional.

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One of the most important documents, notes Massimo Forte, is the Promise of Purchase and Sale (CPCV). This document is mandatory and serves as a guarantee of your position and the position of the owner regarding the cost, timing and other conditions associated with the purchase of real estate.

Do little research and have little information

“The big mistake is the lack of market research on the conditions applied by various institutions in the field of home loans,” defends Deco specialist Elisabeth Policarpo. This move could completely change the terms that will be included in the contract, such as the cost of a monthly payment.

The expert adds that the consumer, as a rule, takes out a mortgage in an institution where he already has a business relationship, which is wrong. “Your bank will not always be the institution that offers the most attractive terms, sometimes it will even be the one that presents the worst terms,” he warns, explaining the importance of running several simulations in different institutions and carefully analyzing the terms offered.

Compare offers with friends’ offers

Each case is individual. This is a premise that João Melo says that many people forget when buying a house. “The bank’s offers are individual for each client. A very common mistake is to compare the offers received with those of friends who have recently taken out a loan.”

According to ComparaJá, responsible for housing loans, apart from the profile, there are other factors that influence the amount a bank is willing to lend. “In addition to customer characteristics (age, salary, expenses, fees, and household), there are other factors such as the type of employment contract, the presence or absence of a second holder or guarantors, and what are the characteristics of the property being purchased.”

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Economy

Legacy of Charles III

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A herança de Carlos III

















Perhaps one of the first questions we ask ourselves when a monarch dies is: what will be his condition? Or: how many zeros will there be on a bank statement? Or even: how much are all the items you bought?

Queen Elizabeth II died earlier this month at the age of 96 and, according to the British newspaper The Sunday Times, she was the owner of a personal fortune valued this year at £370 million, about €427 million, “more than five million more than in 2021.” “. Thus King Charles III (his successor) inherited from his mother not only the throne of the United Kingdom, but also a personal fortune “which he would receive without payment of inheritance tax, in the privilege reserved for royal transmissions”. Most of this wealth would go to Charles and the British government would not receive a single pound sterling.
From sovereign to sovereign

According to CNN, in the United Kingdom, inheritance of assets worth more than £325,000, that is, €373,000, is subject to a 40% inheritance tax. However, Carlos III will not have to transfer this amount to the kingdom’s finances thanks to rules approved in 1993, which provide for an exclusive regime for the heir to the crown when he receives the personal assets of the previous monarch. Under these rules, assets transferred from the sovereign or from the sovereign’s spouse to the next monarch are “exempt from inheritance tax”. In addition, the rules set out in the 2013 government memorandum of understanding also ensure “that the monarch has his own personal money and therefore his financial independence from the state.”

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Charles’ estate includes assets such as Balmoral Castle in Scotland (where Elizabeth II died and is a summer retreat for the British royal family); The residence at Sandringham in England becomes the private property of the British monarch and is known as the place where the family usually celebrates the passing year. In addition, Isabella II had a large stock portfolio and a collection of royal stamps valued at £100m, about 115m euros, according to The Times last year. The famous British Crown Jewels, valued at around £3bn (around €3.5m), also automatically passed to his successor.

Charles III also inherited the Duchy of Lancaster – a royal property since the Middle Ages – which brought the British monarch a private income of £24 million, about €27 million, in the last financial year. The Duchy of Lancaster collected the private heritage of British kings for six centuries. According to El País, its main goal is to provide monarchs with a source of income independent of the sovereign subsidy, a budgetary line provided by the state to carry out their official functions. Despite this, with accession to the throne, Charles loses the duchy of Cornwall, which belongs to the eldest son of the British monarch and which brings about 21 million pounds, about 24 million euros, a year.

To all this will be added the personal fortune of Carlos, estimated at about $ 100 million.
According to CNN, Carlos will also receive an annual “sovereign grant” from the British Treasury of 15 per cent of crown asset income, which for 2021-2022 reaches around 100 million euros, with an additional share of more than 34 million euros. million pounds sterling, about 40 million euros, for the reconstruction of Buckingham Palace in London. This sovereign grant is used “to finance the expenses associated with the official representation of the head of state or members of his family”, including staff salaries, maintenance and cleaning of palaces, official travel and receptions.

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In addition, you will also own a portfolio of the Crown Estate – one of the largest real estate empires in Europe – which includes commercial property, including property in prime locations in central London, rural and coastal land across the country and even the waters around England and Wales. .



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Economy

Elon Musk showed a prototype humanoid robot Tesla Optimus

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Tesla robô Optimus Elon Musk protótipo

Creating a robot has been in the plans of Elon Musk for many years and with several plans for its use. Optimus is the most visible face of the company in terms of creating offerings that will be used in its factories as well as in everyday contexts.

A few hours ago, at the Tesla AI Day 2022 event, a company leader spoke about Tesla’s progress in this area. A new robot has been introduced, which shows that we have real proposals that work and help people at any given time.


Elon Musk reveals his next robot

Over the past few years, Tesla has bet on Optimus your interpretation than a robot designed to help in everyday life. Everyone knew it was just an image of what it could be, not yet fully functional. Elon Musk admitted this on the stage of AI Day 2022.

What was shown just a few hours ago puts this robot on a new level. On the stage of this event, the first functional prototype was shown, which paves the way for what is being prepared. Autonomy is already visible, but it was also clear that there was a lot of work to be done.

Working prototype of Optimus

With a price tag that should be under $20,000, the new Optimus was on stage to show what it can already do. He moved by himself, which was the first time he did, and even danced to show his mobility. In terms of dates, this one was created in the last 6 months and Tesla predicts it will be ready in the next few months.

Equipped with a 2.3kWh battery, this prototype is powered by a Tesla SoC and offers both Wi-Fi and LTE connectivity. In terms of software, Elon Musk's company has redesigned its autopilot, redesigning it to work in a new body and environment. Here, too, real models were used to train the system.

Elon Musk's Tesla Optimus robot prototype

Tesla's great attention to detail

This presentation was about the joints of this Tesla robot. The company has created "human-level arms" with 11 degrees of freedom based on six special actuators, as well as "complex mechanisms that allow the arm to adapt to gripping objects."

While it's still far from being a usable and independent offering, it's clear that Tesla has already changed a lot about its robot. Soon there will be many more news that are placing these new elements in the factories of the brand and, who knows, in our homes to help in everyday life.

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Economy

Electricity and gas prices for families to rise this Saturday

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Electricity and gas prices for families to rise this Saturday

Increases in the price of natural gas and electricity for residential consumers in regulated and liberalized markets will come into effect this Saturday, which in some cases will increase the monthly bill by almost 40 euros.

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