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Land loan: what do you need to know?

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?

mortgage

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?

mortgage loan

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

mortgage loan

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.

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Planning my mortgage loan

Taking a mortgage loan is not “coconut straw.” It is to enter into an agreement that involves a long period of time, and if it is not planned properly, it can become a mess. That is why in Nexxi I want to propose some guidelines for you to plan.

 

Understanding the mortgage loan

mortgage loan

The mortgage loan is one of the main products offered by banks. In fact, according to the Credit Statistics of the Superintendency of Banks , in terms of amount it represents 21% of money lent as of December 2017. And the rationale for this debt instrument is housing. That is, when you want to buy your “ranch”.

It has three main characteristics:

  • Long term (15 to 30 years)
  • Use the same home as a guarantee
  • The rate tends to be stable over time.

In other words, it is not something now for now; implies that you are going to compromise “your future”; the bank assumes the same housing as a risk collection and you should not have outbursts in the monthly installment; since there are no sudden changes frequently.

 

How to plan my mortgage loan?

mortgage loan

Starting from the fact that to assume a mortgage loan is to enter the “big leagues” of personal loans, I want to offer you some guidelines so that you plan this step and it is not uphill for you to take it.

 

Take your time

Take your time

No hurry, take your time. One of the principles by which I manage to make an important purchase decision is the following: “Offers are repeated, money is not”.

This is one of the few almost absolute truths in the market. There will always be a good offer; That apartment you saw that you liked is not the only one there; Believe me there are many other offers that you can access. Therefore, do not despair. For money matters it is better to make coldly calculated decisions, to ardently out of control.

 

Evaluate your financial capabilities

money Online

Take pencil and paper or an electronic spreadsheet and, after having what it would imply in terms of loan amount, installment, rate, and time; Analyze how this is reflected in your monthly cash flow.

That is, stage a budget with and without the fee, so you can see how much it varies. If the variation is very pronounced and does not leave you a margin, it is probably not the right time to acquire a home. So you must be very critical of the result. Remember that mortgages an important part of your future.

 

Each weight counts

coins

Finally, each weight counts. Save as much as you can, and don’t waste your money on things that don’t contribute to you. Focus on what adds value to your finances.

Keep in mind that you will have a commitment of several years; therefore, you must have an emergency fund in a savings account or a financial certificate that covers several months (3-6 months). Therefore, focus on coining each weight.