What is a mortgage and loan – In the banking sector there are different types of credit, which are naturally different conditions of transaction . If we compare the simple loan and mortgage , they differ significantly . Try to identify the main characteristics of each of the types of loans for which you can divide these services into two different categories .
What is a mortgage and loan
Mortgage loan is a target because it is issued only on the security of the acquired property . This means that although the borrower and becomes the owner of the property, it passes it to a temporary bank deposit as collateral for transactions undertaken .
The loan is the easiest type of loan , because it is not the target , that is, can be obtained to carry out any purpose not prohibited by law . The bank does not receive any property as collateral , because it simply can not be.
Comparison of mortgages and loans
What is the difference between a mortgage and a loan ? In contrast to the mortgage loan is a loan target as he issued bail purchased housing . Typically , the size of a mortgage loan a lot more , and therefore more substantial loan term – 10, 15 and even 20 years . In addition , mortgage involves making an initial fee to buy real estate , and in some banks it can reach 30% of the purchase price .
In mortgage lending prerequisite transaction is life and health insurance of the borrower, as well as directly purchased property as it stands is furnished to the operation. Upon receipt of the loan , some banks may at their discretion not to require insurance of the borrower, but the onset of a negative situation is compensated by the fact that for the loan lending , the higher the percentage of borrowings .
The determined that unlike a mortgage loan from is as follows :
Mortgage – special credit and the loan – no.
Mortgage, unlike a loan , pledge involves the acquired property as collateral for the transaction.
The interest rate on the mortgage is slightly lower than the loan .
Period for which the mortgage is given , usually several times more than the loan loan.
Mortgage involves making an initial payment , which can reach 30% of the purchased property and the loan does not have such a condition .
To obtain a mortgage to be insured not only themselves but also their purchase , and for the loan – only yourself or do without this condition.