It helps to know why are mortgage loans and therefore dedicate this post to this financial tool. A mortgage is a sum of money given to any person or entity (borrower) with the additional security of real estate. Failure to meet the agreed conditions for the loan the bank or would become the owner of the property owner.
There are different types or classes of mortgage loans: fixed rate, variable rate with fixed depreciation rate and mixed.
Fixed rate loans:
Is one in which the interest rate remains unchanged throughout the period. The main advantage is that we know what we’re going to pay forever, and that the oscillations of interest rate rise will not affect us.
Loan variable interest rate:
Is one in which the rate varies depending on a particular index which is based the loan and what you say from the outset, before the signing of the mortgage, this adds a differential rate swap (TAE, euribor, MIBOR, debt, etc.).
Mortgage loans with fixed repayment fee:
Are those in which the depreciation rate remains unchanged regardless of changing interest rates. The biggest drawback is not knowing the time that’ll last paying credit.
Mixed loans:
Basically there are variables where the initial period of fixed rates or fixed fee is more than a year. After this stage, usually the first 5 years, a review of the fee, and thereafter his behavior and that the review will equal the Loans variable rate mortgages.
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