For many people, an ambitious plan to purchase credit is an excellent source of funds for its perpetration. Credit today is very much. But some of them have characteristic features. Principled differences has a product called “mortgage”. Let us investigate what mortgage is different from a loan.
The first difference is the purpose of the loan. A mortgage is a loan target. It is issued under the real estate acquisition or land. Other needs these funds to spend. Normal credit can spent for absolutely any purpose.
Mortgage loan form also differs: you cannot get your hands on. The amount is transferred to the bank account of the seller, and then an object or the ground. Credit is usually given in cash.
The mortgage is available for up to 50 years. You must repay the loan much faster (typically up to 5 years).
Without question, the mortgage is different from a loan, it must be pointed out that the key to it is the acquired real estate. Therefore, the latter should be valued and insured. The conventional loan may be any property, cash, surety of third persons.
When arranging a mortgage requires a serious package of documents on real estate (including evaluation and insurance). In addition, the borrower must confirm their capacity to pay. In the case of a conventional loan is sometimes not even need an income statement.
Also on the mortgage interest rates are usually much lower because the risks of the Bank are insured by the acquired real estate. Non-payment of the mortgage loan entails the loss of the purchased object. Should the same commitments under customary credit borrower would face only fines and penalties.
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