Useful advise and an explanation of mortgage credits
With a home equity loan, the customer receives a specific amount of money, along with a commitment to pay it back along with the associated interest, usually through a series of periodic installments. These are medium-term or long-term loans, and they tend to be guaranteed by a home as collateral, under the terms and conditions that are agreed upon with the bank and formalized in a contract.
With the BBVA Fixed-Rate Mortgage, you will pay the same amount every month for your mortgage repayment, with no surprisesCalculate your payment
There are several types of loan/mortgage loan, usually determined by the type of one fee (since are open and can vary in the course of time, if the customer it requests, and the banking organization it approves). For example, an agreement can be made to keep the payments small initially, with the amount then increasing as the years go by. This type can be interesting if, for example, we consider a salary rise. Or it could be the other way around: pay large installments at first, with their amount then decreasing over time (appropriate in cases where, for example, there is another medium-term or long-term expense expected).
Differences between loan and mortgage loan
A mortgage credit has many similarities to a mortgage loan. Although they have the same aim, they work in a different way. It is important to know the particularities of each type when deciding between one or the other; We have to decide which is better adapted to our conditions.
Thus, the mortgage is closed: has some conditions determined in a contract, that in the event that wants modify for the customer, once formalized the mortgage, we do one novación (for example, for expanding the term of duration, the amount to finance, etc.).
On the other hand, in the mortgage loan grants a cash amount, and the account holder can have the total or of only a part of that money granted. Any time the customer needs more money, the amount still available can be drawn upon, as long as the total amount being extended does not exceed the credit limit granted by the bank.
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On the other hand, are several factors more than distinguish both products, such as the interest rate –generalmente great in the credits -, the fees, or the substitutions, etc.
If go to request a mortgage loan, a good advice is that analyze first your current financial situation and future, as far as possible. When paying it back, it is important to plan the payment, as it is usually paid back over a number of years, and this should be kept in mind when doing calculations. Consider other expenses that you are going to have over time, look at your saving capacity and assign a fixed percentage of it to repay your creditors.