The past can bounce on our future. Especially when it comes to incurred and unpaid loan installments, which effectively build our bad credit history at credit checker. Therefore, if you tirelessly dream about your own four angles, the solution is a mortgage or loan. These are one of the safest forms of securing our commitment. Let’s meet what they stand out!
What is the difference between a loan and an apartment loan?
The mortgage can be used for any purpose related to the property. It can be the renovation of a flat, purchase of another property, purchase of a plot or house, its modernization, as well as superstructure and extension. It is also granted for several or even several dozen years, because the amount of the commitment is quite high and can be valued up to 90% of the total amount. In turn, using a mortgage we have complete freedom of choice – the lender will not drill down for what we need money. We might as well use them to buy a new car, an exclusive vacation, as well as to consolidate current loans and borrowings. It is not necessary, as in the case of a mortgage, to settle every dollar spent. The loan granted reaches up to 70% of the property value. However, compared to other financial products, despite being cheaper, it has a higher interest rate than loans.
Both of these financial products are connected only by a form of security – and thus a mortgage entry in the land and mortgage register. In this way, the creditor reduces the risk associated with providing financial support and possible failure to meet payment deadlines.
What to look for when taking out a mortgage?
The key issue is the awareness that we have to deal with many formalities in the above cases. In addition to proving income continuity, we must provide documents regarding our property – a notarial deed, excerpt from the land and mortgage register and property valuation. The interest rate is also an important aspect, which is often deliberately lowered by financial institutions. That is why it is worth checking whether, at the lower interest rate, the bank or loan company has not raised another service, e.g. commission or margin. The financial advisor’s opinion on this matter may prove invaluable. Let’s not forget to use the loan calculator to calculate the probable repayment costs.
Competition in the area of granting loans / advances against housing is increasing. Therefore, let’s check whether the lender offers the option of loan holidays. This is a sensible move, especially when we are not sure about our future and the amount of income we receive. Using other financial products from banks is also an interesting solution. Access to a savings account or term deposits will underestimate the margin or interest rate.
Or maybe a loan from another source?
Mortgage loan in institutions other than banks and credit unions? Of course! Of course, if we like risk and want to become an easy bait for the extender! Unfortunately, in many cases, offers that sound attractive at first glance are just trying to take over the client’s assets. Their victims are usually people in a hopeless financial situation, to which banks or loan companies refused financial help. As a result, they do not read the exact terms of the contract and believe in the goodwill of the lender, even if he secures the loan several times higher than the debt!
When deciding on a mortgage loan from an unknown source, we can often expose ourselves to a noose and unknowingly sell our property for a value lower than the market price. Not only will we lose the achievements of our lives, but we will also go into a spiral of debts. Being in a difficult financial situation is definitely a better move to declare consumer bankruptcy, which gives a real chance to get rid of problems and gradually rebuild your assets. However, this is the last resort. To protect against this situation and against any other, let’s carefully read each contract, even the size of a “small book.” We should remember that we are signing a document on which our future will depend, which is why it is not worth losing one’s life bypassing a few pages.