What is a mortgage loan?

A mortgage is a type of loan that a bank provides for the purchase or construction of real estate. It is one of the most important financial decisions you make in your life, so it is worthwhile to have a good understanding of the rules and information related to it.

A mortgage is a contract between a bank and a customer, in which the bank grants a loan for the purchase or construction of a property, and in return the customer secures the loan with a mortgage on the property. This means that in the event of default, the bank has the right to execute the mortgage and sell the property to recover its funds.

Key information

  • A mortgage is granted for a specific period of time, usually from 5 to 30 years.
  • The amount of the loan depends on the customer’s creditworthiness and the value of the property.
  • The value of the loan can be up to 90% of the value of the property.
  • A mortgage usually requires an own contribution of at least 10% of the value of the property.
  • The amount of the loan installment depends on many factors, including the amount of the loan, the interest rate, the period of the loan and the type of installments – equal or decreasing.
  • It is worth comparing the offers of different banks to choose the best one for you.
  • If you default on your mortgage, the bank has the right to execute the mortgage and sell the property to recover its funds.

To sum up, a mortgage is a serious financial decision, so it is worth knowing well the rules and the most important information related to it. The amount of the loan, the amount of the installment and the period of the loan are just some of the factors to consider. Before deciding on a mortgage, it is worth comparing the offers of different banks to choose the best one for you.