In this study we will provide you with some quick indications to understand what a mortgage is , to understand how it works and what to do to get one. If you believe that the laws and procedures for obtaining a home purchase loan are complicated and difficult to understand, you will have to change your mind after reading this article.
A loan is a loan specifically designed for the purchase of a property
Usually first home, or even for its renovation, especially if it has specific purposes such as improving the energy efficiency of the rooms. The first home loan serves to purchase the main home of a family, but these loans can also be used for the purchase of second homes or buildings for productive purposes. The conditions change, however, and the first home loan usually provides for benefits.
To apply for a loan, you go to a bank or other specialized finance company, even though many companies specializing in providing online financing are proliferating on the internet, which promise faster times and more bureaucratic practices. A mortgage in fact, like any other loan, requires a series of bureaucratic procedures before the contract is signed: a series of steps in which the bank ascertains the economic solidity of the applicant and then passes on to offer its own contractual conditions.
Regarding the first aspect, the guarantees are important: these serve the applicant to reassure the bank about its possibility of repayment of the loan received. The most requested guarantee is the presentation of the pay slip or the tax return, attesting to a stable income, usually from an employee. The other fundamental guarantee is often the mortgage on the property that you are buying: in the event of the insolvency of the borrower, the bank could, under certain conditions, take advantage of the dwelling to cover the applicant’s debt.
The recognition of an interest rate to the bank
the remuneration (ie the income) of the credit institution. The rate is calculated as a percentage of the disbursed capital and can be fixed or variable. The fixed rate does not change for the entire duration of the loan and therefore guarantees a certain stability to the repayment of the installments, the amount of which will always be the same. The variable rate, on the other hand, varies according to the trend of some reference rates: it may be convenient when these are very low as in recent years, but there are no certainties about their fluctuations in the future.
All these features, together with the duration of the loan and the frequency of the installments, help to compile a detailed amortization plan, which, together with the quote, is the document to be requested from the bank to fully understand what the loan that comes to us is. proposed. All payments are reported in the plan, including the interest rate for each installment.