Do you know how to differentiate between mortgage and home loan?
When looking for ways to get a loan, a very common question is about the differences between financing and secured real estate credit . But what is each of these credit modalities for?
Real estate financing
Real estate finance is for people who want to buy a property , whether commercial or residential, new or used.
And how it works?
There are several types of real estate financing, with conditions depending on the type of property, the profile of the buyer and the bank that is giving the loan. And to evaluate the best option, it is best to simulate the main financial institutions, and compare the total effective cost (CET) which is the rate that corresponds to all charges and expenses incurred in credit operations. Also be aware of the percentage required for entry into each of the options.
Here at Good Finance this type of credit has a repayment term of up to 15 years but may vary depending on the bank and the customer’s score, as well as the value of the down payment and installments contracted by the buyer.
It is worth remembering that, as long as the property is not paid off, the owner will not be able to negotiate it without authorization from the financial institution and transfer the debt to the new buyer.
Real Estate Financing Benefits
– Employees employed under the FGTS (Employee Time Guarantee Fund) scheme may use this resource as an input to some financing arrangements.
– Interest rates, although high, are still lower than other types of credit.
– It is not necessary to repay the financing to be able to live in the property.
– Banks offer special conditions to their account holders.
Unlike real estate financing, secured credit (CGI) is a form of loan in which the applicant uses his property as collateral .
How it works
The CGI is borrowing up to 50% of the property’s appraisal value and the applicant must be the property owner. The release of the appeal requires credit and legal analysis, as well as property evaluation. This is the ideal type of credit for those who need to realize some dream, but do not want to give up the assets you already have.
– Interest rates lower than other credit options such as overdraft, credit card and payroll.
– Up to 20 years to repay the loan.
– Portions that fit in your pocket.
– The property is still in your name and you keep using it normally. The only change is that it is now sold to the financial institution (chattel mortgage).
In addition to these benefits, here at Good Finance you still have a grace period of up to 6 months to start paying.
And what is the best credit option?
You may have noticed that secured credit and real estate financing are quite distinct loan options. But choosing each one will depend on your moment of life and the dreams you want to realize right now.
Even so, it is important to realize how much buying a property is an interesting investment, because after repaying the credit, you have a good that raises your capital.
Still in doubt? Share with us and don’t forget to follow Good Finance on social networks as the answer may also be there.