What is a mortgage and what differs from a mortgage

A mortgage is a contract whereby a (borrower) client receives an amount of money (capital of the loans) equivalent to a percentage of the value of a property of a financial institution (lender) property supplied under warranty at the time of the signing of the deed before a notary public.

The customer is obliged to return the amount, together with interest, through periodic payments (installments) until the maturity of the loan.

It is a type of loan in which the lender has a special guarantee for the recovery of the amount borrowed to the client, i.e., a mortgage on a property, usually owned by the customer.

In the event that customer does not pay its debt, the financial institution lender can recover the amount pending collection (totally or partially) through the sale of the mortgaged property.

The mortgage is a contract by which a bank or lender (creditor) gives money to a client (owner or accredited), whose guarantee is usually real estate.

Unlike mortgage lending, where money is removed only once, in mortgage credit is available capital in small quantities, as needed.

There are fixed, variable or mixed loans.

In the first case, the interest rate is fixed in the contract of the credit interest rate is fixed in the credit contract and remains constant throughout the life of the loan. You can know how much will be paid each month, regardless of the market rates vary.

In the case of variable interest, a differential called value (which is constant) is set on a reference value, which in Europe is the Euribor. As these reference values are constantly adjusted, also the variable interest will make it. Finally, the joint interest is a combination of both, i.e. that stays fixed for a period which may be some years to then become resettable.

Whatever the interest rate for mortgage lending, also vary with respect to the mortgage loan as this is paid interest on the entire debt, while at that the interests are calculated according to the amount of money that he has retired.

But they have in common the form of repayment of the borrowed capital, which is usually monthly, for long periods of time, and the destination that will be given to them, which can go from purchase or construction of housing to renovations or repairs of the same.