When you ask anyone how to make money a bank will respond to granting loans, investing in securities … that’s true, but many do not know that the biggest source of profits of banks are commissions. It can be said that banks and charge fees for absolutely everything.

The committees are established by each institution, in consultation with the Bank of Spain to ensure that meet certain requirements and comply with the law.

They must be necessary, ie to respond to a service, and not covered by another product contracted by the client, must be communicated to customers, and posted on the bulletin boards of offices, are not abusive (on this We can discuss long) can not be charged for transactions carried out by failure or negligence of the entity can not be collected if not on the agreement and can not exceed a fixed amounts (eg 1% in the cancellation rate mortgages variable).
Bank charges are applied more

The fees that normally apply are: for transferring money, keep accounts, withdraw money from cash, to have cards for study and / or create a credit, to cancel it, for having an overdraft …

Actually, it is difficult to escape them. The only thing we can do is compare between different entities and seek the lowest commission, because although in theory the commissions should have the degree of marketability, consumers often do not find ourselves in a strong position to the institution .

If you need a loan and the Bank X gives you, surely you can not get to demand that you remove this or that committee. In Spain it seems that bank customers tend to be quite tolerant and slightly combative when accepting payments imposed on us. In another article we’ll discuss how we can be more effective when negotiating any bank fees.
Average annual expenditure of a person in bank fees

A study by Consumer magazine, the annual expense of a person in commissions can vary between 40 and 210 euros, as in a normal situation is to have a checking account, a credit card, a debit card, make an average of six transfers, and any income checks.

Moreover, as a credit request must checkout and pay the relevant fees and opening study … and do not ever forward anything of debt, because then the commission will also pay partial or total early termination (see article on repayments mortgage). And if we find a bank that will lend us the money something cheaper, take us there we will bring the mortgage to pay the relevant commission of subrogation.
Entities that do not charge bank fees

Lately we see in many media entities ads say not collect commissions. We appreciate the effort, but not we really saying that all this has buts and small print.

There are a number of committees (such as account maintenance) not charged to creditworthy customers or shareholders, but others continue to claim (as the opening of mortgages).

Other entities not condition the charge you a wide range of commissions to you customer loyalty with them (including payroll, insurance, mortgages, accounts, cards, pension plan …). So far recovered that lose revenues.

If we said at the outset that the commissions as a whole are the main source of profit of entities clearly we will never eliminate them entirely. Only eliminate the commissions financial (maintenance of accounts, transfers to an amount, issuance and renewal of cards). This is business. And no business sacrificing your goose that lays golden eggs. At best, let in 50 golden eggs make a normal one.

Until recent years, credit institutions were often not given quantities beyond 80% of the appraised value of housing that he wanted to buy. But the rising price of housing has been more and more people need more of that 80%.

Moreover, household savings has declined, so that few people will have in their coffers with the remaining 20%. To which will be added expenses and taxes.

Although by definition have a mortgage as collateral the property acquired with it, banks do not want to stay in the homes of those unable to pay if they can avoid. Your profit is in charge interest as long as possible. By law, mortgages of up to 80% of appraised value will not be affected by other security than the same property.
When asked for a loan worth more than 80% of the appraised value of housing

But the circumstances previously mentioned, many people are forced to order more than 80% of the appraised value to meet the payment of housing and the costs associated with their purchase as well as furniture, appliances, etc..

In these cases, institutions ask for a guarantor to respond with their property (collateral) if the owner has not replied to credit payments. This is supposed to involve family or friends in an embarrassing situation for both. Also someone buying a second home may be required to attest that the first new acquisition.

But there are people who have no previous possessions and have no relatives or trusted people in the country that serve as guarantors, even in situations of economic solvency. This makes a lot of people could not access the purchase of a home and what banks also lost important business niche.
Unsecured mortgages over 80% of the appraised value to acquire housing

Thus, organizations can give no guarantee mortgages even if more than 80% of the appraised value of the house to buy. In fact, tend to arrive even at 120% of that value.

In return, organizations require the customer to take out insurance to cover the unpaid dues. Thus, monthly payments will consist of three added: principal, interest and insurance. This may adversely affect our future solvency level, because in exchange for not presenting guarantors will face a significant increase of quotas for the amount of insurance. Therefore the repayment terms are broad, up to 40 years, which makes payments more affordable and offset by rising insurance costs. And also this extension in time makes the operation profitable for the institution.

But there is often no guarantee mortgages as specific products widespread in all entities. Rather, individual cases are studied and their characteristics. Because even with insurance and property as collateral, banks grant loans only if they believe that his client maintains a certain level of solvency.

For example, as a rule, do not grant mortgages whose rates exceed 30% resulting from customer’s monthly income. And taking into account other loans that may be paying (car, cards, etc.).. Furthermore, it may impose certain conditions, including that the client has official or permanent contract in a medium or large, etc. If the conditions itself to mortgages tend to be stricter in the case of mortgages are usually unsecured him even more.

In any case, the usual practice of banks is to apply (rather require) a guarantor for transactions over 80% of the appraised value, rather than establish a mortgage without a guarantor but assured.

Once you know what your goals and your options for paying your debts need to know what the best option for you.

It is very important to understand the difference between:

1. Debt consolidation.
2. Debt Negotiation.

The consolidation and debt negotiation have their advantages and disadvantages. To see the advantages of debt consolidation and click here to see the benefits of debt negotiation click here.

Compared to debt consolidation, negotiation may seem advantageous, since it actually negotiate with creditors to avoid having to pay part of the money you had paid and cancel it as bad debt.

Pepe Imagine a bank borrowed € 1000. When the bank asks you back Pepe Pepe money tells the bank to 400 € if you will forgive the remaining € 600. Sometimes creditors accept these agreements can cost as much effort and sometimes money to recover the remaining € 600.

Although this may seem like a dream come true, has many drawbacks associated:

1. Is displayed on your financial history you took out a negotiation and you came to an agreement that did not pay all your debt.
2. Although it is a better option than having a debt in your history, is very harmful for you, as any future creditors will see that you have not paid the full amount of your debt in the past.

When should you choose to consolidate your debt and when to negotiate?

1. If you have outstanding debts to more than one creditor for you debt consolidation.
2. If you think you have too much debt, there is no way you can afford them and that can go into bankruptcy, then debt negotiation is the right solution for you.