English mortgage that comes to mean ” death pledge ” or promise of death, which means that the right of pledge dies when the obligation is fulfilled or the property is repossessed through foreclosure. And yet we talk about death when a loan that accompanies us throughout our lives.
The mortgage is the long – term loan quintessential usually formalised in a range that can go from 20 to 25 years , the difference with other long – term loans is that the acquired property is to guarantee the repayment of debt, while other long – term loans do not have a guarantee associated.
In the case of long – term loans will be used to finance the purchase of assets , the most common among individuals acquiring a vehicle, but in the case of companies use can also be to finance mining operations in which case, its use is vital to ensure the normal operations of the company. The return of long – term loans are made according to the agreed quotas, according to the interest and agreed time.
The utility of mortgages is unquestionable, another thing is that the exorbitant prices that have reached homes in Spain, combined with the strong crisis which we live has reduced ability to pay of families , have formed an explosive cocktail that has caused many borrowers saw made his “promise of death” in its least desired direction foreclosure.
The associated interest is usually fixed or variable, mainly related to Euribor we usually see in the news with its ups and downs, where we say fortunately turn it down mortgages. But it is not always so, as these may have associated ground clauses that prevent the lowering of the monthly fee.
By providing some data, according to the INE 93.2% of mortgages constituted in January used a variable rate, compared with 6.8% fixed rate, being the Euribor reference rate most used in constituting mortgages variable rate, specifically in 85.7% of new contracts. The average interest rate for the mortgages on residential property is 4.14%, 2.0% higher than in January 2013.
Such contracts may also have associated reductions in the interest rate, associated with the relationship with the entity hiring other products, it is also common to be included in the hiring different insurance as life, home or hedging quota case unemployment, may also be agreed repayment exclusion periods quota, part of the loan to a fixed rate and a variable rate, etc.
With regard to contracts, we have to read well and ask us to explain anything you do not understand before signing, because we are not hiring portability of a mobile phone, we are signing a contract with us for many years and depending what can we conceive negotiate significant savings . The general conditions of a loan are not as read Don Quixote, but neither are the story of 15 minutes we read to children before bedtime. Let ‘s take our time, let ‘s read calmly, general conditions, insurance partners, special conditions, etc. and once we have all abundantly clear a signature and were recorded in the land registry, not only with the acquired property but also with the associated mortgage contract.
And if you have read this article because it will sign your mortgage contract is welcome to the club of mortgaged .