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Today we will raise an issue that is of particular importance for people planning to buy their own apartment: we will answer the question, what are the differences between mortgage and housing, because – contrary to appearances – this is not the same! Mortgage vs housing: what is worth knowing about this?
What is a mortgage and a home loan?
Let’s start with the basics: a housing loan and a mortgage – the definition of both products may seem quite similar, but in reality we are talking about quite different solutions, do not forget about it!
What is a mortgage? This, as the name suggests, a mortgage secured loan. The money borrowed under it must be used for a specific purpose: purchase of an apartment, renovation, purchase of a construction plot, investment in premises for rent, etc. A mortgage can be associated with a relatively long loan period. What’s more, with its help it is possible to borrow a relatively large amount, although of course it is influenced by a number of factors.
A housing loan is a mortgage that must be used for housing purposes, for example, buying your own apartment, house, plot or garage. As with any mortgage, it must be secured by a mortgage, it is characterized by a long loan period and a high loan amount.
What is the difference between a mortgage and a home loan?
It’s okay … but both definitions sound very similar, if not identical. What divides them then? Home loan and mortgage: what differences are worth knowing? What is the difference between these two products? The priority in this case is the freedom to use the funds, which in the case of a mortgage is a little wider. A housing loan can be taken for the purchase of a house, flat, garage, and a mortgage for additional purposes – e.g. financing the construction of a house, purchase of a construction plot, renovation of an apartment, etc.
Which is better: a mortgage or a housing loan?
What to choose? A better solution will be housing loan offers or maybe mortgage loan offers? The choice between mortgage and housing should be determined primarily by the purpose for which we intend to allocate funds. Think about what you want to use the money for and see which loan will enable you to realize your goals. It is important that banks often use these two terms interchangeably, so you need to check for yourself what the bank offers.
Of course, we remind you that, regardless of which loan you choose: housing or mortgage, carefully analyze the offers available on the market and do not make hasty, ill-considered decisions. Pay attention, among other things, to the mortgage interest rate for a specific offer or the interest rate on a residential loan for an apartment. Check the bank’s margin, commission, minimum own contribution, additional requirements, etc.