If you want to buy, renovate or build your home you might need some financing from a bank or mortgage company. In return, the mortgagee is given a guarantee. This is the right of mortgage on the home. With this mortgage the mortgagee will be given the right to auction your home in case you do not comply with the monthly payments or obligations on your contract. The mortgagee should be able to this without any judicial intervention.
Types of mortgage loans
» Annuity mortgage
Annuity mortgage is the most common type of mortgage where you take out a loan for a fixed period of time. The loan plus interest are paid in monthly installments. The monthly repayment is made up of two parts, an interest payment of the loan and a capital repayment. In the early years, most of the repayments will go toward paying off interest on the loan. And since interest is tax deductible, your net (effective) mortgage costs will be lower at the start of the term. As the loan reduces, the interest goes down. So as time goes on, more of your monthly repayments go toward paying off the capital.
» Endowment Mortgage
Endowment mortgage has the maximum tax benefit. During the tenor of this mortgage, you only pay interest on the capital borrowed (which is tax deductible) while you take out an endowment insurance to save for the principal. The objective is that the investment made through the endowment policy will be sufficient to repay the mortgage at the end of the term.
When is someone eligible for a mortgage loan?
» When you have a permanent employment
» Sufficient Income
» At least 18 years old
Change any of the numbers below to calculate your mortgage or loan rates.***
*Depends on your age. The loan should be paid off before or when you turn 60 years of age. **The Interest rate may fluctuate. ***Indication
What is the loan amount?
The loan amount depends on someone?s age, income and fixed expenses a maximum of 80% of the market value, purchase price or construction costs of their house. A 100% financing is possible with some companies through 'Fondo di Garantia pa Vivienda'. To know the exact amount of the finance you can get, you should make an appointment with an adviser of a bank or mortgage company. This person will give you advice on the amount that can be financed according to your financial situation.
What is 'Fondo Nacional di Garantia pa Vivienda'?
This is a government-sponsored foundation that offers a guarantee to financial institutions. This guarantee is for first homeowners that do not have a down payment when taking a mortgage.
What are the requirements when applying for a mortgage?
» Valid Identification
» Your two last pay slips (monthly salary)
» Letter of recommendation from your employer
» An appraisal report not older than 3 or 6 months (depending on the financial institution)
» Constructors Quotation or purchase agreement
*Same documents are required for spouse or partner
Which insurance policies are required?
» Endowment insurance at least equal to the loan?s amount and term
» Personal accident Insurance covering at least equal to loan?s amount and term
» All-inclusive Fire Insurance at least equal to the reconstruction value of the property as stated in the appraisal report.
Financial 
