In recent years, the land loan is increasingly becoming widespread, but is often mistaken for the mortgage loan. We try to understand what it consists of, what the advantages are and what types can be subscribed.
Land loan: what are the special features?
For young people, for families for singles, buying a property for residential purposes is an important and demanding choice that requires careful analysis. As for the mortgage loan, also for the land loan, it is necessary to take due account of one’s income and financial capacity and of one’s own needs.
The Mortgage Fund is a medium-long term loan, which lasts from 1 to a maximum of 30 years and provides for the stipulation of a first degree mortgage on the building to guarantee the credit to be disbursed. Usually a maximum limit of 80% of the value of the property is granted, but in some cases, it can reach up to 100%. In the latter case, it is necessary to provide the bank with a further guarantee (for example bank guarantees, insurance policies).
Another feature of the mortgage loan concerns the fact that it can only be stipulated if the first residential home is to be purchased.
Land loan: what are the advantages?
Compared to the mortgage loan, it should be noted that the mortgage loan involves the application of very advantageous interest rates payable . Notary fees are considerably reduced and the long duration of the loan repayment plan allows you to enjoy a favorable tax regime. If you decide to pay off the loan early, the mortgage guarantee is automatically canceled.
Land loan: types
There are different types of mortgages to choose according to your needs; first and foremost, you need to choose between a fixed rate mortgage and a variable rate mortgage. The fixed-rate mortgage loan provides for an installment of the same amount to be paid for the entire duration of the contract. The variable rate mortgage loan requires interest rates to change based on market trends and consequently the amount of the installment changes over time.
For useful information, contact a Consultant and find out the mortgage loan reserved for you.