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Mortgage Loans & Home Financing

There are different types of loans for mortgage loans: repayment loans, maturity loans and annuity loans. The purchase of a condominium or a house, including the construction of a house, is known to involve great financial resources. In this respect you can not avoid getting real estate financing. Real estate finance is also known under the name of construction finance and is actually the typical way to get the desired home. If you want to implement the project of building finance, you can’t avoid comparing different offers – this also includes considering different forms of financing. For example, some forms of credit are available to consumers for such large-scale financing as that of a house. Anyone who has signed a home savingscontract is already on the right path, which can be used to finance the house, as well as a home loan.

 

The mortgage loan to finance the property

The mortgage loan to finance the property

If you have mortgage lending in mind, you will most likely not be able to avoid a mortgage loan. A mortgage loan is granted by many banks – but one thing should not be forgotten: The mortgage loan is not an alternative to mortgage lending, it is an almost indispensable part of almost every mortgage lending. There are a few important things about a mortgage loan that you as a potential borrower should know and know in advance: The mortgage loan comes in three versions, so to speak, as a repayment loan, as an annuity loan and as a final loan. To say something about all three in advance: Each of the mortgage loans must be secured and, as is customary with real estate, with a mortgage.

 

Mortgage Loan – Repayment Loan

Mortgage Loan - Repayment Loan

A repayment loan means that the repayment does not change during the entire term. In the repayment phase, you always pay the same amount to repay the loan. However, the interest rate on the repayment loan changes in that the interest component falls. In a nutshell, this means that the more time passes with the repayment loan, the less you pay – the overall rate drops. However, it is now the case that a repayment loan is no longer offered by the banks and that borrowers also use the annuity loan and the final loan much more.

 

Mortgage Loan – Final Loan

Mortgage Loan - Final Loan

As the name of the final loan suggests, the loan amount only has to be repaid at the end of the term. During the term, the borrower only pays the interest, so that in the end only the current loan amount has to be repaid. However, the final loan also means that the borrower has to save during the term so that he can repay the loan. The thing is that with the final loan: If the loan is due, it must also be repaid in one sum.

 

Mortgage Loan – Annuity Loan

Mortgage Loan - Annuity Loan

The most used type of mortgage loan by borrowers is the annuity loan. The annuity loan is like a normal loan in terms of repayment. The monthly repayment installments consist of part of the interest and part of the loan amount to be repaid. The repayment rates do not change during the repayment period, you will always pay a fixed amount. It is important to know here that the monthly installments do not change, but the interest portion continues to decrease in the course of the repayment, but the portion of the repayment of the loan amount increases. The whole thing is offset against each other and so a stable repayment rate is the bottom line.