Everything you need to know about home mortgages

Currently there are financial resources that represent an alternative to make the purchase of a home, since many times and for different reasons the buyer does not have the financial solvency necessary to cover such a huge expense in his budget.

However, in these cases the options are usually variants and they must analyze properly to find one that really benefits the buyer and adjusts to the financial reality of the buyer. There are many types of home mortgages that are worth knowing, below we present them.

What is a Mortgage?

It is a type of loan or financial aid that is offered as an option in banks, so that the client can obtain a sum of money in exchange for taxing the property.

This type of loan has very specific characteristics that are respected according to a legal agreement between the bank and the person applying for the mortgage loan.

A mortgage has an exact amount stipulated in a previous analysis; This determines the term in which the loan money must be repaid, usually it is a long time so that the client can pay off the debt in its entirety.

As a guarantee of cancellation for the loan, the house itself is offered, which will become part of the assets acquired by the bank if the payments agreed for the cancellation of said debt are not respected.

Aspects to consider

The most important aspects that are stipulated when establishing a mortgage contract before are the following:

Capital

It is basically the money offered by the bank; Usually it is a lower amount than the house is worth, this is to cover the investment by the bank in case the property must be auctioned.

Interest

It is the percentage that you must pay extra on the total amount of the debt, this amount is paid directly to the bank that granted the loan.

Interest can have a fixed or variable rate of increase, which usually increases the debt gradually if the pertinent payments are not made.

Term

It is the time when the loan money will be repaid, in addition to the interest.

Mortgage’s trial

It is a legal process where the person who obtained the loan to buy the home loses the property due to non-compliance with the acquired commitment.

Types of Home Mortgages

Among the types of loans that exist, there are those that help the client to acquire a property that will serve as their main home, where they will live regularly, and for the purchase of a second residence.

The difference between the two are basically the conditions of the contract, because in the case of the acquisition of a first home, the interests and the terms have amounts easier to cover.

home mortgage

Mortgages for home construction

There are offers designed by banks to offer facilities that guarantee the money necessary for you to build your house.

This type of financial resource requires that the applicant be the owner of the land where the property will be built, have a construction project endorsed by an architect and have the relevant construction permits.

Mortgages for home remodeling

It is the type of mortgage loan that is designed for those who need to cover home remodeling and expansion expenses. The amounts that are handled in this case are usually lower than the value of the home and the payment terms are also shorter; You also have to pay interest on the total amount of the mortgage.

Other types of mortgage

There are other types of loans where the resources of the lender increase, for which an extension of the mortgage can be requested from the bank.

There is also the option of asking the bank for a reunification of all the customer’s debts, such as personal loans and credit card debts.

For this, the options are: extend the mortgage that the client already had, grant a second mortgage or cancel the pending one and create a new one taking into account previous financial experience.

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