It is legitimate to ask lately the difference between a loan or a mortgage . Often, the differences between loans and loans, for example, are so blurred that there is a risk of confusion. Between the mortgage and the loan they are a bit more important instead. Let’s start by saying that both are certainly a valid help that can be granted to us if we have economic problems or if our salary or our income is not enough to achieve what we want or simply to purchase an important asset such as the first home or its restructuring.
Unfortunately, the crisis makes everything more ephemeral, even our revenues, and this is why both loans can make us comfortable. Obviously, despite the differences, the requirements that must be respected are similar. First thing: in both cases you have to rely on a bank or a credit institution that can give the sum that we are going to request.
Second thing: in order to take advantage of this amount, we will need to demonstrate, through some required documents and the signing of the application or subsequently of a contract, the requirements and guarantees that the creditor Institute requires of us. Furthermore, you should not be included in the list of bad payers to avoid problems of any kind or even the non-acceptance of the application. Let’s understand the difference between loan and mortgage and what requirements are needed for both.
What is a mortgage?
The mortgage is a loan that includes two parts, one lender and the other borrower: the first one pays a certain amount of money to the second. This sum of money, which is quite large, will then be returned by the borrower through certain conditions established at the time of the contract, in a total and inclusive manner of the interest accrued over time. The mortgage is a loan that is carried out to request a large sum, usually intended for the purchase or renovation of a house.
Given that the sum is high, banks, for this type of loan, require so-called collateral, for example the mortgage on the house. This means that if the sum of the loan is not paid, the bank itself could acquire it. Usually, however, the repayment of the mortgage takes place in the form of monthly, quarterly or half-yearly installments and, given the sum, its duration is long. When the contract is stipulated, the amortization plan will also be established, i.e. all the times and dynamics that establish the time, the number of installments and the amount. Since the mortgage is mainly used for the purchase of a house, therefore recognized on a social level, various tax breaks have been made over the years such as the tax deduction of interest.
How to get a mortgage?
First of all, you have to choose the bank where to apply for the mortgage. The bank will deliver the application to be completed: this action must be carried out with all possible attention. The question will be in the form of a questionnaire and the information that must be provided are as follows:
- personal data
- residence and current home
- family unit and any dependents
- employment and seniority
- the working sector
- monthly and annual credit
- description of the property and its value
- not have debts or possibly specify exactly how much they amount to.
What is a loan?
The loan is a loan of a certain amount which must not exceed 31 thousand dollars for personal loans and which will be repaid in monthly installments or in a single solution. The loan is relatively short and, in the case of bad payers, you can decide to choose the assignment of the fifth. These loans can be divided into various categories mainly classifiable into finalized and non-finalized. If you decide to apply for a finalized loan, please note that it will be disbursed through a store that does not require any particular guarantees, it being understood that the amount disbursed remains tied to the purchase of a specific asset.
Loans not finalized, on the other hand, concern an agreement between the bank and the customer and the disbursement of a sum that can be spent as is best believed, with no particular guarantees required but with a higher interest rate.
The request for a loan, then, requires the bank to ask for guarantees that can be real, such as the mortgage, or trust information, in the sense that the customer through documents can be able to demonstrate that he can actually repay the debt.
There are, however, different concessions and different types of personal loans that can be useful even without particular guarantees.
To rely on a loan of this type, however, certain requirements are needed which are common to all types of non-finalized personal loans:
- valid identity document
- permanent or fixed-term employment contract
- paycheck or pension
- life insurance.
When we go to apply for the non-finalized loan, we must make sure that we have brought all the required documents to allow the credit institution to continue with the evaluation check which will determine whether or not we are able to obtain a loan.
The thing to be said is that the applicant should not be at risk of insolvency, otherwise acceptance of the application could be jeopardized. Precisely because these loans do not require particular guarantees, the interest rate is higher than others.