Mortgage loans are understood as those financial grants granted by a financial entity, adding an interest rate in exchange for the repayment of the loan periodically.
In the case of mortgage loans, the credit institution has the power to sell the mortgaged property in case of default and, thus, recover the amount pending repayment. Something to keep in mind when getting involved in this type of personal credit.
- These loans usually have a high cost and usually a long duration.
- It is also possible that the financial institution requires the direct debit of the payroll, thus increasing its commitment.
- In short, these are loans with an extended duration in which the conditions vary based on the mortgaged asset, in addition to the amount borrowed.
Expenses associated with a mortgage loan
Every mortgage loan involves a series of mortgage expenses associated with said credit. These mortgage expenses can be summarized in four costs , which will vary based on financial aid.
- NOTARY COST
First the cost of the notary. Basically it is the fees involved in the registration and management of the purchase of the property. A cost that is normally around 0.1 – 0.5% of the mortgage loan.
For example, in a mortgage of $ 100,000 at a notary cost of 0.5% , the total cost for registration and management of the property would be $ 500.
- COST PER REGISTRATION OF THE HOLDER
The cost for the registration of the ownership of the property, at the same time, the payment for registering the deed of the same.
An expense around 0.2%.
With the same example mentioned above, the extra mortgage expense would be $ 200.
- MANAGEMENT COSTS
Third, the cost of the Agency itself. This includes the costs of including the property and taxes of the mortgage.
A variable mortgage expense based on the manager’s own fees
- Appraisal Expenses
Finally, the mortgage expense for the appraisal of our property.
Another cost that depends on the value of the property purchased.
In short, the mortgage expenses associated with a mortgage loan vary based on the value of the credit acquired and the value of the property. Usually, the costs are usually high and the long-term return period.
Generally, the expenses related to a mortgage loan usually amount to 15% of the total cost of the property.
Following the same example:
15% of the mortgage cost of $ 100,000 would be a total of $ 15,000 that we will have to disburse. This figure is an estimate of what the costs associated with obtaining a mortgage loan could cost us.