The concept of mortgage credit refers to the amount of money that a client requests by committing to return it through periodic installments, in addition to a series of associated interests. It is generally backed by a home guarantee, under conditions established in agreement with the financial institution and reflected in a contract.
There are different classes of mortgage loans, especially fixed by the type of installments. They are usually open and can vary over time in the event that the client demands it and the bank accepts it. An example is that it is agreed to pay smaller installments at the beginning of the credit, to increase them over time. It can be a very interesting option in the event that we expect a salary increase over the years.
Differences between mortgage credit and home loan
Although they present many similarities, especially in terms of purpose, there are several aspects that differentiate the mortgage credit from the mortgage loan. It is necessary to know the characteristics of each modality before deciding on one option or another.
The mortgage loan is closed, presenting specific conditions in a contract, which in case the client wishes to modify them once the mortgage loan has been contracted, they must make a novación (already sa to increase the amount to finance or increase the term of duration).
On the other hand, in the mortgage loan an amount of money is lent and the holder has the possibility of having all of it or a part of that granted capital. Each time you need more money, you will be able to have what is left pending, as long as you do not exceed the credit limit provided by the financial institution.
There are other aspects that also differentiate these two products, such as the interest rates (higher in credits), subrogations or commissions.