Financing real estate

 Mortgage loan or mortgage?

You hear people speaking in recent years both on mortgage loans, and about real estate. Are you sure you put the question whether the two often refers to the same type of loan or if there are differences between them.

It is clear that refer to consumer credit and mortgage loan offerings for home buying. The term mortgage was imposed last year but due to change of policy that most banks and credit funds have approached her, mortgage loans secured by real estate purchase. This is why has seen an explosion of home loans - the Romans were enabled to guarantee credit whether you are buying property, sureties and other guarantees are removed from the calculation. There is a fundamental difference between the two types of loans and the interpretation is different from bank to bank. Basically, the mortgage loan is guaranteed by a mortgage on property, while real estate loan can be secured with other types of guarantees (guarantor, other buildings). It is generally thought that the housing loan can also finance construction of buildings, while the mortgage loan that is not possible because it is impossible to be mortgaged to a nonexistent property. From a legal perspective, the two names from different laws: the mortgage loan is governed by the law 190 / 1999, while real estate loan justifies the Civil Code.

- Although both mortgages, real estate and credit offers call for buying homes, you have to remember is that the difference between the two lies primarily in the type of guarantee. The mortgage loan is guaranteed only with real estate mortgage and housing loan can be secured with other types of guarantees (guarantor, other buildings).

- The housing loan can be financed and mobile buildings, while the increase in mortgage-Thinking this is not possible, because it can not be mortgaged to a nonexistent property.

- The repayment period of up to 20 years for real estate credit and up to 25 years for the mortgage.

- If the housing loan, the monthly rate to be repaid can not exceed 50% of your net income, while mortgage loan can be up to 35%.

- There are some banks that charge higher rates if mortgage than the mortgage. Therefore, we can say that it is cheaper than real estate mortgages, in that you do not need another security (for example, another house, land, people who want to endorse you) outside the home for you take credit. Mortgage loans for real estate investment is the type of credit granted by financial institutions authorized to finance the construction, purchase, rehabilitation, strengthening or expanding housing-purpose buildings, industrial or commercial.

It will be secured by mortgage on real estate, land or building for which credit is granted. Until full repayment of the loan, mortgaged real estate may be alienated only with prior consent of the lender. Who granted mortgage? Banks, National Housing Agency, Home Savings Bank and other financial institutions authorized by law. Who benefits from this credit? Individuals aged over 18 who have Romanian citizenship and permanent residence in Romania. If you can not support only one such credit is accepted and co-debtors.

The loan amount granted will be made available to you either in full or spread. That the loan will be obligated to sign a contract for home mortgage insurance. That means you will be beneficiary of the insurance beneficiary and will have to pay insurance premiums once the reimbursement rates on mortgage loans receivable.

General features of mortgage

Objective: buying / building a house or upgrading the existing

Currency in which credit can be awarded: USD, EUR or USD.

Period of award: at least three years, more than 25 years

Down payment: 20-30% of value

Considered income: wages / rent / dividends / professions. Take into account the income of the family (spouse, relatives living with the applicant and household credit).

Interest: 7-25% (varies from one bank to another, depending on currency).

Warranty: home mortgage, home insurance

Repayment of loan: is made in monthly installments, in accordance with the amortization schedule, which is part of the credit. Under the new regulations, the monthly rate may not exceed 35% of net income (yours and the family). This means that if you have an income of EUR 200, the monthly rate may be up to EUR 70.

Documents

- Loan application (it is an application form, found on each bank or credit unit).
- Copy of your identity, and after the husband (if applicable).
- Copy of marriage certificate or divorce application (if necessary)
- Copy of book work (written pages)
- Salary certificate (form, from the bank)
- Certificate of pension (if retired)
- Form your own risk of disputes with third parties.
- In case of modernization or consolidation of a home, you must send quotation of the paper.
- Other documents: according to the bank. After you have drawn the loan file, it will be assessed by the bank or credit institution, which will take into account the risks of not paying rates on time. Risks are determined according to age, social status (married / single, children / no children), age at work, etc..