Which mortgage loan suits you: fixed or variable?

The types of loans you can find

There are times in life when for lack of liquidity, to be able to buy an expensive good, such as a house or a car, or to face an unforeseen expense, you need to ask for a loan. The most known are the personnel and the mortgage, since who more or less who has requested one of these at some time. However, they are not the only ones that exist, and there are different types of loans depending on what we want the money for and that they may have different interests and conditions. Therefore, before applying for one, it is convenient to continue reading and to know the main types of loans that are available and which one best suits your circumstances.

The most popular types of loans

Mortgage loan. As we said, it is one of the best known. Not in vain is present in the lives of most families for decades. They are granted to buy a house or to build it, and the housing in question is the guarantee, although it is not ruled out that the financial institution also asks for payroll or guarantor. They are medium-long term loans that are paid over several decades through a monthly fee. The interest rate can be fixed, variable or mixed and the main reference index is the Euribor.

Personal loan. They are those who ask to face a specific need at a certain time such as an unforeseen expense, a trip, a wedding, a small repair at home, etc. Sometimes no guarantees are requested, therefore, as the risk assumed by the financial institution is higher, interest rates are higher than in mortgages, where housing is the guarantee. They usually return in a few months or years. There are financial entities that offer pre-granted loans to clients with a good credit history. (We recommend you read the articles here What are the pre-approved credits and what is the credit history ).

Ways Mortgage Loan Can Improve Your Business

This rule regulates the figure of subrogation (together with the novation) specifically referring to loans and credits with mortgage guarantee, in both its substantive and fiscal aspects. This law was enlightened by the phenomenon (seen with perspective, incipient) of the phenomenon of the promotion of housing financed by banks, in which the buyers assume the loan from the developer that taxes the acquired property.

Exposed the concepts of the figure of subrogation, let’s see its lights and shadows:

The lights of subrogation in mortgage loan

Ease: the buyer is remarkably easier to subrogate in a live loan that “pilgrimage” between entities to seek financing offers.

Cost savings:
Of two types:

The new debtor saves a new valuation, in addition to commissions for loan granting (commission for opening and study)

Posts tax: Exempt from the tax of Documented Legal Acts the operations of subrogation of debtor in mortgage loans. In this way, the buyer saves the tax that entails the creation of a new mortgage on the property that he acquires. As a general rule, the constitution of a new mortgage is made taxable of documented legal acts (AJD), one of those aspects has been brilliantly treated in this post.

In addition, in the Lend For All Canada event that the mortgage is constituted on the occasion of a sale and the seller has the mortgaged property, it will save the costs associated with the cancellation of your mortgage (notarial and registration fees, and bank fees for early cancellation, amen of other hypotheticals such as the so-called “commission for the preparation of documentation for cancellation”, whose legality is currently in question).

The “fiscal light” nonetheless has a simply relative brightness

Based on the assumption that the AJD Tax is transferred to the Autonomous Regions, some have established a total exemption from this tax on the mortgages that are set up to finance the acquisition of a habitual residence (in the case of my CA, Galicia, this The bonus is applied to the mortgage that finances the habitual residence when the seller’s mortgage is canceled, and up to an amount equal to the outstanding balance for the latter, so that it would only pay the amount of the new loan that exceeds the seller’s debt-the reason is clear: give a tax treatment identical to that of subrogation, in which the buyer assumes the outstanding debt of the seller, and if it is not enough to pay the price of the property and would like to finance the rest, would have to extend the original loan asking for more money from the bank, and that mortgage loan extension would be taxed)

The Future Of Mortgage Loans


For now, the process to request a mortgage loan is still somewhat slow, since it requires several procedures that lengthen the waiting time . What is certain is that banks are already starting to use online forms and simulators so that the client does not necessarily have to go to the branch, but the subsequent management of the operation must be completed in person.

Use of video conference to deal with the bank and virtual reality to “visit” the house . Instead of forcing the client to come forward, the entities could advise him remotely by video conference or by other channels (by chat, for example). Likewise, virtual reality could be used to view the property and thus accelerate the selection.

Automated valuation to value the price of the property. By automatically assessing the house or apartment, the waiting time would be significantly reduced.

Automated capture of customer data . Thanks to the big data , the banks could have the personal, economic, financial and fiscal data of the applicant without having to ask for it.

Credit analysis using algorithms . Once all the data has been collected, they should only be entered into a computer program so that it calculates the financial risk of the operation.

What about the future? Mortgages in Blockchain

In the future, the blockchain mortgage can become very common. Although we do not yet have all the technology, we know enough to imagine its possibilities. If the term “blockchain” seems strange, we can understand that what we are really talking about is a new way of handling information.

Blockchain is a distributed accounting technology where information is decentralized , which means that each user gets a copy of the record, and the central source or authority does not need to maintain the integrity of the information. The updates are automatically downloaded and recorded as they occur , so that everyone has the same information.

Easy Rules Of Mortgage Loan

Have for you trying to get a mortgage well here’s how it works people you’ve seen my videos before when other graphics our particular Forte of mine so there’s a house all right let’s say that the value of the house on the open market is , pounds all right and you plan to put down a , pound deposit lucky you and that means you need a thousand pound alone or mortgage all right now how do I know you put down a xxx half and deposit well maybe you can’t afford.

pound deposit the deposit is down to what you can manage to scrimp and save together okay persuade parents or friends to give you whatever happens to be so you’ve got a deposit from somewhere all right and the rest is the mortgage so a combination of what’s called equity that’s your bit and a loan from bank secured on the property makes up the funding for the hundred thousand pound property all right now here the LTV as you’ll sometimes see it quoting.

The press put a jargon there the loan to value ratio is simply that compared to that as a percentage all right so here the LTV , as a proportion of the value of the property literally our loan to value ratio is % all right and in simple terms basically the higher that is the harder it is to get the loan all right now back in the ridiculous days pre-financial crisis there are banks around that would say no problem you can have LTVs of more than one hundred percent one hundred and twenty five percent you can actually borrow more or than the value of the property from a bank.

I’d even give you hints and tips as to what to do with the extra alright so on a hundred thousand pound property this may sound a little mad but it was happening you could borrow one hundred and twenty five thousand pounds I’m not kidding your bank website saying things like well book yourself a holiday buy a car with the extra now that is madness.

I’ve got a lot of people into big trouble which is why LTVs tend to be a lot lower Nell okay because of something called negative equity she’s the third bit of jargon I’ll cover just now but here’s my take away ok the higher the loan-to-value ratio naturally the higher the interest rate and the heart of the mortgage will be to come across so if you can scrimp together as much of the deposit as you can get hold of bring down the loan-to-value ratio but tend to find that better deals and become.