A mortgage loan is a loan made by financial institutions in the medium or long term, both to buy, repair, expand or build housing, and to acquire commercial premises or offices. Now we explain how you can apply for a mortgage loan : types of loans, interest rates and stages to apply for a loan.
To ensure compliance with the credit -which can be requested in any banking entity-, the asset acquired will be “mortgaged” by the granting entity between 15 and 20 years, until we cancel it in full.
Currently, there are several options offered in the market to apply for mortgage credit. But if we want to choose the best one, we need to analyze in detail the following variants:
Type of credit
There are three types of mortgage credit , and each of them determines a different payment obligation:
- With Letters of Credit: financed through mortgage bills that the entity can acquire or trade on the Stock Exchange.
- Endorsable Mortgage Mutual: financed with the bank’s own resources, it can be endorsed or sold to a third party for financing, the latter being the creditor of the mortgage mutual.
- Non-Endorsable Mortgage Mutual: also financed with the granting bank’s own resources, but without the possibility of the debt being transferred to other banks.
It is the percentage we must pay to the bank for having made the loan, in addition to the amount requested. There are three types of interest rates that we can avail according to our availability:
- Fixed rate: stays the same for the entire time the credit is paid.
- Variable rate: presents variations during the payment period.
- Mixed rate: remains fixed for a fixed term, and then becomes variable.
Annual Equivalent Load
It is the cost of credit for a year expressed in percentage. It represents a key aspect because, as CAE decreases, financing is reduced.
How to apply for mortgage credit?
The application for a mortgage loan and subsequent acquisition of a property implies a development process consisting of several stages:
- Request. Enter the loan application in the bank, and prove the income and assets through the commercial and legal background of the property.
- Approval. After reviewing the documents, the bank will inform us, through a commercial executive, if it approved or rejected our request.
- Course entry. Once the application is approved, the bank begins the formalization of the loan.
- Background study The property titles will be analyzed by a lawyer to be able to issue the approval report.
- Draft writing The lawyer will write the corresponding deed and the draft will be sent to a notary.
- Definitive writing. From the draft, the notary will write the final deed that must be signed by all involved.
- Additional procedures. The existence of another mortgage loan without paying off the property will require additional procedures.
- Firms. After verifying the solvency of the property, the deed is signed by the bank and then the notary closes it and delivers the copies.
- Registration with the CBR. The property must be registered in our name with the Real Estate Conservator (CBR) corresponding to its location.
- Payment: After verifying the registration, the mortgage and the deed, the bank will make the payment to whom it may concern.
- Office. After the process, the bank will send us a copy of the deed.
- Insurance It will be mandatory to purchase fire and relief insurance.
Opting for mortgage credit is not so complex if the implications are known beforehand. Now that you know more about the loans to acquire a property, you can venture into this project with greater security.