If you find yourself buying a house and you don’t have the necessary money, you will have to think about a mortgage … Let’s try to explain you some secrets:
- What is the difference between a fixed rate and a variable rate mortgage?
- When is it convenient over the other?
- When and how does the installment you have to pay change?
If you are interested, then read on!
What is a mortgage?
A mortgage is a contract in which a financial intermediary (usually a bank) delivers a sum of money on loan, against a guarantee, to an individual or company, called the borrower . A mortgage is generally used by the contractor for the purchase of goods and services, such as for the purchase of real estate, the renovation of buildings or business investments. In the case of a mortgage for the purchase of a property, the property itself represents the guarantee of the loan.
To know more:
- What is the level of debt?
- What are the costs associated with opening the mortgage?
- What is the ISC?
- Can a mortgage be moved from one bank to another?
How much will I have to pay to repay a mortgage?
To find out how much you will have to pay to repay a mortgage, you need to examine the amortization plan, that is, the payment plan that cancels the debt. Each installment consists of two parts: the principal amount (i.e. the amount that repays the borrowed sum) and the interest portion (i.e. the interest you have to pay on the residual debt). The value of the installments depends on the type of mortgage you have chosen, whether fixed rate or variable rate.