In today’s post we will explain the meaning of a mortgage loan and its characteristics.
The “mortgage loan” is a financial product through which a financial entity presents us with money based on a collateral, a certain amount of money is to be spent on the purchase or restoration of real estate. In the case of non-payment, the entity may require us to pay the appropriate money through a judicial procedure and, in the last case, we could get to keep our home as a total or partial part of the debt collection.
The peculiarity of mortgage loans is that the credit institutions that grant them, in addition to the personal guarantees that they require in any loan operation, also require real guarantees about payment compliance on the operation.
The characteristics of mortgage loans are:
-The different installments will be charged to pay a current or demand account in the name of the borrowers, which are associated with the mortgage loans.
-Due to the high amounts granted, the terms for their repayment are longer, and the interest rate to be paid is shorter in relation to another type of mortgage loan .
-The fee to be paid will be around 35% of the net monthly income of the people who request it.
-Within the mortgage loan and depending on the interest rate that is applied, it will be classified as: mortgage loan with fixed interest, mortgage loan with variable interest or mortgage loans with mixed interest.
-The maximum amount granted by the financial institution is usually around 80% of the appraised value of the real estate.
-Before its concession, the entity will carry out a feasibility study on the borrowers’ ability to pay, which will require abundant documentation.
For more information, contact us, we are Grupo Opción Capital and we will be happy to receive your call.
Pro and con of mortgage
The illusion of starting a new stage in your life buying your first house or land is something very exciting. Do not forget that in order to make a good decision about whether or not it is convenient for you to acquire a mortgage, it is very important that you know the conditions of the mortgage that you plan to acquire, such as the interest rate, insurance, administration costs, as well as the advantages and disadvantages etc.
When applying for a mortgage, you have to take into account that the debt is not going to be paid in a few months. This can last for several years. Remember that you have to pay your installments in a disciplined way, otherwise your debt will get out of control and you may even lose assets such as your house or your car in order to pay.
- Restrictions and prohibitions
There are some conventions that dictate what you can use the money for, these are quite restrictive and it is important to be careful when requesting them. Keep in mind that this money is specifically to buy your house or land and you cannot use it for anything else. Always check carefully before signing the bases of the agreement.
Nothing is free in life and borrowing money is no exception. For this reason, it is important that you fully understand all the implications and compare the different options before applying for your credit. Remember that a loan has as a principle to owe money to someone and that in addition to the original amount you have to pay interest for the service they gave you. Always look to choose plans with a reasonable interest rate.
A fairly common belief is that if you apply for a loan or credit it will take a long time to grant it. Currently the processes have been simplified and the steps to be followed have decreased considerably. This guarantees you having the money you need when you need it.
Today mortgage loans are accessible to any type of person. It is not necessary that you are a great businessman to be granted a loan, you can have any type of job and there will always be an option that best suits your needs.
- Almost instantaneous liquidity
A very important benefit of credits is that they are an essential tool to achieve a goal more quickly. Imagine having to wait many years to save the amount of money you need. Not everyone has the immediate liquidity necessary to meet their goals.
Finding the ideal home is not an easy task, but applying for and getting the most suitable mortgage if it can be.
Create healthy habits, allow for much more concise plans, and offer better mortgage loan options. If you want more information about these and get closer to the home you always aspired to, do not hesitate to contact us!
We will solve all your doubts about it. We also invite you to click on the image below to learn more about mortgage loans and achieve your immediate goals