If in the near future we have a lot of expenses related to, for example, building a house or renovating an apartment, we usually take a loan. However, it is worth knowing that the same goals can be covered by taking out a mortgage loan. In the following article, we explain very precisely what a mortgage is and what conditions must be met to obtain it. We invite you to read carefully!
Mortgage loan – the most important information
Taking a loan to buy basic home appliances such as a new TV set or washing machine is a normal situation. The low loan amount is also connected with the fact that we will have a short funding application procedure. Problems may arise only when we want to get a loan amounting to several hundred thousand zlotys and at the same time do not want to reveal for what purpose we intend to spend this amount. In this case, the best solution will be a mortgage. However, it should be borne in mind that the type of financing is secured by our property.
Mortgage loans and mortgages – what’s the difference?
Many people identify mortgage loans and mortgages. This is a misconception – it’s worth knowing that these are two completely different products. A mortgage is a targeted solution that is intended for the purchase of real estate, modernization or renovation. Persons taking such a loan become the full owners of such a plot when they fully repay this type of loan.
A mortgage loan is a product that owners of unencumbered property can use to release their ‘frozen’ financial capital. This solution has one extremely important advantage. The point here is that when taking a mortgage, we have complete freedom in spending the funds obtained. The identification of these two financial products is due to the fact that in both cases real estate is the main collateral of the liability. The loan and mortgage allow incurring liabilities, which can amount to several million zlotys. In turn, the repayment period of this type of financial liabilities can be up to 35 years for a loan and 30 years for a loan. The difference can also be seen in the interest rate. As a rule, mortgages are cheaper than mortgages.
Mortgage loan – maximum amount
It is worth knowing that due to the fact that when taking out a mortgage loan we can count on a very high amount and we do not have to inform the banking institution what we want to allocate the funds obtained, the process of applying for this loan will not be short. Under no circumstances will the bank’s decision be immediate. When assessing applicants’ ability to service their debt, banks will verify their revenues and current financial standing. They also thoroughly assess real estate properties that play the role of basic collateral for a given obligation. The maximum loan amount depends on the value of the property.