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When investing, it is more than usual to apply for a credit from a bank or financial institution to finance part of the purchase. Some are conditional on the age, income and needs of the borrower. The mortgage is secured by a real estate property that you own and the amount is not based on the amount of your income but on the value of the property mortgaged. Discover here why subscribe to a mortgage and how it works.

Mortgage Loan: Why Do It?

The mortgage is used to finance new projects, various purchases or to repay another outstanding credit. At the time of taking out this kind of loan, the borrower offers as collateral one or more real estate.
The mortgage can be on the housing you are buying or on another property you already own. The advantage of the mortgage loan is that it can be used to finance any type of project and this, whatever your personal situation and whatever your income. You just need to own a property and offer it as a guarantee. In case of late payment of monthly payments, the bank has the opportunity to seize and sell your property.

Mortgage loan: how does it work?

The mortgage works like a conventional loan. It is therefore possible for you to prepay, to adjust your monthly payments or choose a variable or fixed rate. The only difference with a conventional credit lies in the fact that you have to offer a real estate guarantee.
The mortgage is repaid in the short or long term depending on the debt ratio of the borrower. The only condition is to repay the last monthly payment before celebrating 90 years.

The amount of the loan will depend on the value of the property being mortgaged. Once the value of your property is evaluated by an expert, the bank will lend you 50 and 80% of net worth. It is obvious that the more mortgage you offer, the higher the amount to be borrowed. Credit charges for a mortgage vary between 1% and 20% of the mortgage amount. As there is no age limit, the mortgage is very interesting for seniors who wish to borrow money. The mortgage loan also allows to place a property in life or buy back old credits.


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