These are some of the terms that you should know before applying for a mortgage loan. Visit this link to calculate amortization schedule with extra payments to principal with our calculator.
Debtor
In a mortgage loan, you are the debtor, that is, the person who takes the loan with the financial entity and who assigns the power or property rights to this entity.
Creditor
The creditor, in this case, the bank or financial institution, is the one who is legitimately authorized to demand payment or fulfillment of the obligation or debt. This means that the creditor is the one to whom the property rights were assigned.
Guarantee
A guarantee is an additional assurance that financial entities sometimes ask for to grant you a mortgage loan. The guarantor must be a person with a fixed salary or real estate that can support the debt in case you default on the loan installments. Not all financial institutions ask you for a guarantee, nor in all mortgage loans.
Interest rates
Mortgage loans are offered at fixed, variable, and mixed interest. You can easily calculate amortization schedule with extra payments to principal with our calculator.
Financing percentage
It refers to the percentage of the asset for which they are going to lend you the money. Organizations usually loan you 70-100% of the money you need to buy a home. This percentage can vary if the home is new or used.
Maximum amount
It is the maximum amount of money that they are willing to lend for that reason. This may vary depending on the type of home.
Term
It is the amount of time for which the financial institution is willing to lend you the money you need, most of the mortgage loans are long-term, between 15 and 40 years.
Requirements
Depending on the financial institution or bank, the requirements may vary. These are the minimums:
- Be between a certain age and have an identity document
- Have a fixed income of at least one minimum wage in force in your country
- Know the price of the house to buy
