The question we ask ourselves is, what are mortgage loans and how do they work?
Acquiring a home, especially if it is the first, is one of the most important decisions in adult life. Not only because you have to allocate all the savings to it, but also, surely you need external financing.
What distinguishes this type of credits is that the guarantee is the real estate that is being acquired. That is, if there is a default over time in the payment, the bank can auction off the property. For peace of mind, in general, banks give refinancing opportunities so that this does not happen.
The variables that must be taken into account when thinking about a mortgage loan are:
Be able to prove a monthly blank income mortgage loans.
The banks, to make sure that you are a solvent person and that you can face the payments of the installments, must verify that you have had a blank income in the last months. This can be proved by the salary receipts of an employee in a dependency relationship. If you are monotributista, you will need proof of payment. If you are autonomous, the registration of self-employed persons.
Have a savings that represents at least 25% of the value of the property.
The loan is never for 100% of the value of the property. The percentage may vary according to the line of credit and the entity that grants it. Of course, never exceeds 80%, so you always have to have a significant amount of money saved.
Depending on the type of credit and the age you have, the period in which you will have to return the money will vary. That’s why it can be 10, 20, 30 years and that will also affect the monthly fee you have to pay.
Interest rate, if it is fixed or variable.
Of course it will always be convenient for the interest to be fixed. Especially if the salaries are adjusted according to inflation, but in general it is not what is offered. The most common interest rate is the variable, and the advantage is that it is usually an interest, at least initially, lower than that offered as fixed. There is also the modality of making the first years of fixed interest and then variable.
Since 2016 there is a type of loan that is adjusted by , that is, by Purchase Value Unit. The amount of that are paid monthly in the fee are fixed. What varies is the price of the index that is updated daily according to inflation. To learn more about this type of credit, go to this note where we explain in depth what credits are and how they work.
Type of amortization, the most frequent are the French and German models.
The most common is the French depreciation system . In this case, most of the interest on the loan is paid in the first installments since the calculation of the same is made based on the amount of capital pending amortization. That is, the more capital is owed (at the beginning of the loan) plus interest is paid in the installment, when the capital is being amortized, the share of the interests in the quota is lower.
In conjunction with French, another of the amortization systems used for mortgage loans is German. In this case, the installments are given by a constant amortization of the capital plus interest, calculated on what is still owed on the loan. In this system the quotas are decreasing.