In the family of mortgage loans, the mortgage loan occupies a special place, while remaining close to traditional amortizable credit. As the name suggests, mortgage credit must relate to real estate owned by the borrower, whether it is property acquired through the loan in question or another property. But it can also serve other purposes than a real estate purchase. Explanations.
Anyone who plays with the idea of buying a property is very likely to think about a mortgage loan or mortgage loan.
What is a mortgage loan ?
A mortgage loan is a mortgage on a property secured loan. Today, land charges are predominantly used as mortgages. In practice, land charges or mortgages are only used to a small extent, even if it suggests otherwise in language. The mortgage loan is an important building block in private real estate financing. It is used to finance new buildings or the purchase or modernization of a property.
The lender can be a building society, a credit institution or a life insurance company.
The borrower can be a natural person as well as a legal person.
Advantages of Mortgage Loans
Unlike installment loan is available to the lender in the event of a performance disruption as additional security. If the borrower does not meet his obligations, the lender can repay the mortgage loan by, for example, a forced auction. This security for the lender leads to more favorable loan conditions than, for example, an installment loan.
Disadvantages of mortgage loans
By entering a lien, the later sale of the property is somewhat difficult. If a mortgage loan is taken over by a new owner, the mortgage loan must be redeemed in parallel with the sale, which may result in additional land registry and possibly notary fees.
For this you need the loan amount, the interest to be paid, the initial repayment, the term and any special repayments. The monthly rate is calculated from this. In addition, the amount of the remaining debt is displayed graphically after the specified period, as well as how much money you have paid to the bank in the form of installments and interest over time. So you know roughly what a property will actually cost over the period.