Although there are different types of mortgages, they all have in common that they are a contract that is signed to obtain bank financing when we buy a home.
Mortgage have the distinction that the assurance of the credit is the actual property, which additionally stays in the possession of the account holder while he pays the obligation.
Is a home loan equivalent to a home loan credit?
In like manner language, we for the most part talk conversely of home loan or home loan credit while alluding to the funding that is mentioned for the acquisition of a home. We utilize the two terms as though they mean exactly the same thing, however in actuality they are unique.
The home loan is a genuine right of assurance that guarantees that the debt holder will pay the leaser the credit conceded for the acquisition of the home. In the event that you don’t pay, the lender has the privilege to demand the offer of the property to fulfill the sums owed.
The home loan credit, then again, is the cash that the bank loans to the purchaser to secure the house. Cash that you need to reimburse inside a specific period and for which you should pay revenue.
Components of a mortgage contract
The home loan is comprised of three principal components:
Capital
It is how much cash that the bank loans the purchaser to secure the house. Contingent upon the element, the cutoff supported by banks ranges somewhere in the range of 80% and 100 percent of the examination esteem, albeit at times it is restricted to a comparative level of the deal esteem, on the off chance that this is lower than the evaluation esteem.
Interest
It is the rate that the borrower should pay to the bank for the acquired capital. Contingent upon the sort of home loan, this interest can be fixed or variable.
Term
It is the time laid out for the reimbursement of the acquired cash in addition to premium . On account of home loans, they are normally extensive stretches, on the grounds that how much the home loan credit is additionally high. The more extended the reimbursement term, the lower the portions, yet the higher the interest.
Types of mortgage
Various kinds of home loans can be recorded by the financing cost, the sort of portion, the kind of land or the main interest group to which they are coordinated.
In the event that we center on the financing cost, which is maybe the most utilized model, they are delegated:
Fixed mortgage
The expenses don’t differ all through the span of the home loan. As such, they are steady and are not impacted by the promising and less promising times of the Euribor, which is the principal reference record for contracts.
Then again, the loan cost at the hour of getting the home loan is higher and the greatest reimbursement period is more limited than in factor rate contracts. At times, the commissions for halfway and all out amortization are additionally higher, so taking care of the home loan early is more costly.
Adjustable mortgage
In this kind of home loan, the expense changes relying upon the financing cost that is applied when the audit happens, this is by and large referred to the Euribor. Assuming that the loan cost falls, the portions will likewise be decreased, yet in the event that it rises, they will turn out to be more costly.
For variable home loans, it ought to be noticed that they have longer reimbursement periods, arriving at 40 years, and lower commissions than different kinds of home loans. Most of home loans that are endorsed in Spain are of variable interest.
Mixed mortgage
Blended rate contracts join an underlying period with a proper loan cost, in which the portions are steady, for the most part in the main long stretches of the reimbursement time frame, and a variable loan cost, in which the portions fluctuate as per the development of the reference file.
What type of mortgage to choose?
When choosing a mortgage, it is convenient to study the offers carefully before signing, because, having such a long repayment period, any small difference (in interest, commissions or combined products) can mean a large amount with the weather.
The majority of mortgages that are signed in Spain are of variable interest, although those of fixed rate have been growing in recent years. However, there is no better or worse type of mortgage, it will depend a lot on your personal preferences: on whether you are looking for the certainty of a constant installment or the lowest possible installment, even though it may rise in the future.
