If you’re thinking of buying a house by turning on a mortgage loan, this article is written for you
Most real estate sales involve the buyer’s ignition of a mortgage loan.
Often called mortgage, mortgage lending on the house is a product that in recent years has proved to be very convenient, mainly due to the reduction in rates.
However, often, even the most advertised mortgages can hide pitfalls!
So let’s see in this article everything you need to know about mortgage loans.
What is the Morgage Loan
The loan, or mortgage, mortgage, are loans disbursed by banks whose repayment is guaranteed by a mortgage on the purchased property (immovable). That’s why we also talk about home-guarantee loans.
In addition to mortgage loans, there are also mortgage-free loans, called unsecured loans. In this case, the only guarantees provided are the personal ones of the one who contracts the loan, who undertakes to repay the sums obtained thanks to his hand signature (hep from which the chirographer expression).
In general, however, loans without a mortgage do not exceed 30 thousand euros in amount and 15 years of duration, so they are not very suitable for the purchase of expensive goods such as the house.
The fact that there is a mortgage to guarantee the loan, if on the one hand it may seem a limit because, in case of non-repayment of the debt, the bank will be ready to take back the purchased asset (the house), on the other hand involves a series of facilities for the buyer, first of all the fact that even in the presence of guarantees on income not so high, the credit institution can grant the allocation of the sums necessary to conclude the purchase.
In some cases, it may even happen that a mortgage loan without income is granted, provided that the one who obtains the loan is able to provide sufficient guarantees (for example, the signature of a parent or other relative with a high income and wealth).
In addition, the presence of a mortgage also involves the application of lower interest rates than all other forms of loan and periods of repayment of much longer sums.
How Mortgage Loans Work
When a loan or mortgage loan is taken out, the lender bank usually registers on the property purchased through the credit consideration a mortgage of value between 150% and 200% of the amount of the loan disbursed.
Here is an example.
If you had purchased a property with a mortgage of 150,000 euros and the bank had made a 200% mortgage registration, in case you can no longer pay all the installments, the bank will be entitled to recover up to 300,000 euros.
The value of the mortgage also depends on the fact that, in addition to the cost of the property, the credit institution also needs to include all expenses such as lost interest, late payments and inflation-related costs.
A first snare of which often those who contract a mortgage do not take into account is the duration of the mortgage registration.
Since, in fact, it cannot last more than 20 years, in the case of loans of longer duration, the bank will be forced to renew it once two decades have passed, most of the time charging the borrower additional expenses.
Finally, it is necessary to know, when buying a property with a mortgage, which despite being made by the bank, the notary fee for the mortgage registration is always charged to the buyer.
Moreover, since usually the notary calculates the amount of his fee based on the value of the mortgage and not the mortgage, a mortgage registration at 200% will always involve more expenses than a registration with a lower percentage.
How to apply for a mortgage loan
To apply for a mortgage loan, it is necessary first of all to go to the branch of a bank or contact a bank consultant who deals with mortgage loans.
Obviously, everyone can ask for a mortgage, but not everyone can have the concrete hope of getting it. There are, in fact, of Requirements to be met: In general, banks ask the applicant to be between 18 and 65 years old and to be an Italian citizen or resident in Italy for at least one year.
It is also necessary to meet some economic requirements, such as the presence of a certain monthly income, in order to guarantee the payment of the installments. In general, the amount of the instalment, including both the principal and interest in the shareholding, must not exceed one third of the applicant’s monthly income.
Clearly, to complete the preliminary phase of the loan, it is also necessary that adequate documentation relating to the property you want to buy is presented, to ensure that they are not burdened by further slopes or mortgages and that the declared value is the actual one.
In this regard, usually, the bank before issuing a final mortgage resolution, instructs its expert to carry out an expert on the property, the cost of which is included in the investigation, in order to determine its actual value.
Once the bank, having examined all the documentation and requests for further additions (for example of the guarantees), will have issued a positive resolution on the disbursement of the loan, the buyer has time normally up to 6 months to be able to make the stipulation before a notary.
After these 6 months, the bank reserves the right to modify all the conditions established in the resolution, which therefore could have an instalment amount and worsening conditions so, unless unforeseen, it is always better to respect the times.
Read here the complete jadnews Guide to all types of loans or discover everything there is to know about the mortgage loan first home.
What banks provide it
Which banks provide the mortgage loan?
All banks can provide mortgage loans for the purchase of a property, although it is clear that not everyone will be so advantageous.
In fact, the duration, the maximum amount that can be exciable (usually not more than 70/80% but in rare cases it can also reach 100% of the value of the property), the type of interest applied (fixed, variable, in a constant installment or maximum ceiling or so on) and therefore the rate, as well as the amount of the installment itself.
Some banks then ask their customers who subscribe to mortgages to submit to some special conditions, for example to take out mandatory insurance policies on the property or to open a current account on which to charge the paycheck within the institution.
To date, not only traditional banks can lend mortgages, but also online banks are able to make very lyating offers regarding mortgage lending.
To choose the bank where to ask for your mortgage loan, read this article dedicated to the best online banks or our ranking of the best Italian banks.
Click here to find the best loan at the best possible conditions.
