Mortgage and loan are two forms of financing in which the bank grants a sum of money to the client which must then be repaid by the client, including interest. In short, the loan is requested for large amounts and for long periods, the loan instead for smaller amounts and limited and shorter periods of time. In both cases, speaking of both mortgage and loan, we indicate a circumstance in which a subject requests a more or less substantial sum of money and undertakes to return it.
Main differences between Mortgage and Loan
We have seen that both types are forms of financing that make them different are the main characteristics, which can make one or the other more advantageous according to the needs. Let us analyze the aspects of both methods of financing.
Regarding the loan:
1. It has a shorter duration than the mortgage.
2. The loan provides for the disbursement of a small sum, for this reason guarantees are generally not requested except in special cases.
3. The loan has no tax relief, as it is generally requested for needs not considered primary.
4. With the loan we are not obliged to declare why the sum is requested, it can be used by the applicant in the manner he wishes.
As for the mortgage, the main features are:
1. The mortgage must always be aimed at the purchase of an asset, which must be declared, usually a mortgage is required for the purchase of a house or a structure for the company as a shed.
2. You can take advantage of tax breaks, such as the deduction of part of the interest from taxes.
3. The duration of a mortgage is medium to long, up to thirty years.
4. The amount that can be requested with a mortgage is high
5. The lender to whom the mortgage is requested requires guarantees, both personal and material. For example, the mortgage on the house, or on the property you will buy.
WHAT ARE THE STRONG POINTS OF THESE TWO FORMS OF FINANCING?
Choosing between one or the other solution requires evaluation of the situation in which you are. To understand which of the two modes is more suitable for you, we list below the strengths of both. For the loan:
1. It has a higher speed to be dispensed from 24 hours to 15 days
2. A notary is not needed as it is a public act
3. There are less costs for opening the application form
Taking out a mortgage instead will have these advantages:
- 1.Lower interest rates
- 2. Longer duration
- 3. You may request higher amounts
By recapitulating a loan you can get it in a short time, with lower costs and a short duration and usually without guarantees, but the sum will not be high. While for the mortgage, the grant times are longer and the request has higher costs and you will have to have solid guarantees to see it granted, but you can have a higher sum and a time for the repayment up to 30 years.
As far as loans are concerned, a clarification must be made, they are divided into two categories, those finalized and those not finalized. Those aimed are strictly related to the purchase of a certain asset and are those loans that you can usually apply directly in the shop where you go to buy the asset in question, for these loans usually no guarantees or pratite to be carried out. In the case of non-finalized loans, however, you will have to contact the bank directly, you will not have to specify how you will use the funds.
WHAT SHOULD WE ASSESS BEFORE PROCEEDING WITH A LOAN OR LOAN?
We said that the choice will be made according to our needs and therefore you will have to evaluate the important aspects before proceeding with the choice.
1. Amount to be requested
3. the typology
4. the Taeg which is the real cost of financing
These are all aspects to be carefully evaluated before the application, if you find yourself having to apply for a home loan, the first aspect that you will have to consider and the rate, which can be fixed or variable.
LOAN HOME AND MORTGAGE HOME, THE DIFFERENCES
The home loan is a loan that is usually required to carry out work inside the property. It is usually requested to cover small expenses related to renovation, maintenance or more simply for the furniture. The loan, on the other hand, is usually requested for the purchase of the property, can be at a fixed, variable or mixed rate and the charge is usually made directly to the current account.
THE LOAN INTEREST RATE: THE DIFFERENCES
The fixed interest rate is a rate that remains unchanged for the duration of the contract, it is a guarantee against market fluctuations but at the same time does not allow you to take advantage of any facilitations. The variable rate instead provides for different installments based on the market rate and economic policy, the risk is that you may find yourself paying a higher installment that may not even be sustainable. The mixed interest rate allows you to switch from a fixed rate to a variable rate with deadlines, which are established by the initial contract with the bank, with this type it has advantages and disadvantages of both the fixed rate and the variable rate.