Do you want to build or reconstruct a house and are you wondering whether to use a mortgage or building savings loan? It is not an easy decision, so we will help you by introducing and comparing both types of loans.
Generally, a building savings loan is more convenient for you as a natural person because it is more versatile than a mortgage loan. Building savings benefits from state support and a lower interest rate in terms of the amount and length of fixation. However, even a mortgage loan has its advantages and it is up to you what you prefer.
Advantages and disadvantages of building savings loan
Building societies guarantee a stable and stable interest rate, which allows them to accurately quantify how much a client’s loan will be. Unlike a mortgage loan, where the bank lends you almost any amount, the building society loan will lend you a maximum of 80% of the estimated property price. However, an important advantage over a mortgage is that the client receives a state contribution every year, which reduces the APRC of the building savings loan. The building society client will also appreciate the fact that he can repay a higher amount without any penalties at any time.
Building societies do not require real estate collateral to a certain amount of credit, and only have a proven income. When selecting a building society, concentrate on the terms and conditions of the loan and its repayment. Find out the credit closure fee, which may vary with the higher target amount. You can save even several thousand crowns. Furthermore, be aware of the conditions for providing a bridging loan and collateral requirements.
Advantages and disadvantages of a mortgage loan
If you want to be happy with your credit, beware of your financial possibilities and clarify the concept of repayment. Let the credit experts compare and explain both options.
In the case of a mortgage loan, you are responsible for repaying your own property. In the event that you as a client get into financial problems, the bank will sell your property and cover the outstanding loan with the money spent. Unlike a savings bank, the bank will also lend you 100% of the value of the property, but at a higher interest rate. If you are under 30 years old and want to pay the smallest amount, you can repay the loan for up to forty years, as you will be able to repay it up to 70 years of age.
But it always depends on your options. You can set the maturity period according to your wishes and you can change it in certain cases during repayment. The length of fixation is also important for you, which will give you the same interest rate for a certain period, for example, a year or even twenty years. Adjust the fixation length depending on whether you expect any reception. In case you inherit something or someone returns a debt, choose a shorter fixation period, you can repay a larger portion of the loan without penalty.