Choosing the right mortgage is also choosing the type of loan associated with your mentality and your financing possibilities.
Four types of loans are offered by the banks to help you find a mortgage suitable for your needs.
The depreciable loan:
This is the loan most often offered by banking organizations. In this case, you repay both the borrowed capital and the interest on your due dates. There is a variation to the amortizing loan known as a loan with constant maturities. The portion of interest repaid decreases over time as the share of capital increases.
The pure or “capped” rate loan:
In this case, the amount of interest changes according to the financial market. On a pure adjustable rate loan, you can theoretically see your interest rate go up or down. Now there are two things to consider: the quality of the rates when you buy your credit, a historically very low borrowing rate that is likely to be revised upward, while a historically high borrowing rate may be revised downward. Secondly, not all banking organizations offer a fair pass-through of financial market fluctuations, that is to say that banks most often deactivate the downward revision in order to prevent a low interest rate. Ensuring more correct remuneration of their credit. If you are going to start a real estate and you are going to get lone and you need information about the lone visit here Real Estate Tampa FL 2018 .
To prevent a possible upward revision, French banks have developed a so-called “capped” adjustable rate loan system. Maturities are governed by a “ceiling”: whatever happens in the financial market, the upward repercussions will not exceed a fixed rate set by your banker at the time of your subscription. In return, you will not fully benefit from the downward repercussions.
The secured adjustable rate loan:
This loan differs from the “capped” loan because its interest rate can vary without a pre-defined ceiling. However, the rise in the interest rate cannot exceed the rise in prices, calculated using the inflation index. If this rise in the interest rate does not make it possible to catch up with the movement of the financial market, your banker can then add deadlines to your credit. This type of particularly complex loan offers the advantage of calculating your loan on the basis of a lower interest rate than in the case of a “capped” loan, but higher than in the case of a soft loan. Revisable pure.
The loan in fine:
Unlike the repayable loan, you will only repay the interest on your installments, the principal being paid back in full and once at the end of your loan. The initial calculation of the interest rate is on a higher basis than on a repayable loan since there is no amortization of the borrowed capital. The advantage is that you will have the opportunity to put the share intended for the recovery of capital during the loan period, and thus enjoy a greater mobility of your assets.