One of the most requested financial products by Peruvians is the mortgage loan for home purchase. It gives you the possibility of acquiring a real estate property in installments, through a loan granted by a financial entity. Below I explain how this type of credit works, when it is used for the purchase of a home.
What is a mortgage?
As I previously told you, a mortgage loan is a credit product offered by financial institutions, with the purpose of acquiring real estate. When the mortgage loan is used to buy a home, it works as follows.
The financial institution that grants the loan buys cash the house, using the capital granted in the loan.
A mortgage is established on the house , which is a right that guarantees compliance with the obligation to pay the credit. This right allows the institution to force the sale of the home, in case the debtor does not fulfill his payment commitment.
The beneficiary of the mortgage loan can use (legally said to be beneficial) the home from the beginning of the loan. In fact, it is its owner, although the mortgage restricts the right to do some operations with said asset, such as its sale.
Main characteristics of a mortgage loan for home purchase
There is a wide variety of mortgage loans for home purchases in the Peruvian financial market. Some of them are thought of in a special sector, such as Peruvians living abroad, and young people who are starting a home.
However, they all have the following common characteristics.
1. It is a long-term loan
A mortgage loan is a long-term loan, whose payment term exceeds the decade. The investment involved in buying a home is high, so you have to divide the payment between a large number of monthly installments, so that they are available to your applicants.
Generally, the term of a mortgage loan for the purchase of a home is between 15 and 20 years, in exceptional cases reaching 30 years. As the term is longer, the monthly fee to be canceled is smaller, so the amount of fees is used to adjust the payment to the capacity of the applicant.
2. To benefit from the credit, it is necessary to take some insurance
All financial institutions require the beneficiaries of their mortgage loans to take out insurance. Financing this insurance is an additional expense that is added to the administrative costs and the interest payment generated by the credit.
3. You can request it in both national and foreign currency
In the market there are credits that are given in national currency, and many others in foreign currency (dollars). You can choose from it the one that works best for you , based on your own sources of income.