The number of people who do not see any difference between the two types of credit is relatively high, so that it would be good to know what does each type of credit suppose when you go to the bank for a loan for the purchase or construction or buying a property .For some banks mortgage and consumer credit are the same product, others consider that is a difference between the two types of credit. However, the confusion comes from the fact that lately these differences between the two types of loan have decreased significantly.
A person who intends to apply to a loan to buy a house has to decide on the type of credit that he is contracting for: real estate or mortgage. Even if, theoretically at least, the mortgage loan is a variant of the estate, in the offer of the banks there are enough differences between the two.
Mortgage loan seems to have imposed in the last year by the policies applied by most banks and credit funds, namely securing the credit by mortgaging real estate purchased. However, they appear some differences . Thus, mortgage loans are guaranteed by mortgages on real estate, while consumer credit is accepted for other types of guarantees (endorsers, other property). In addition, the housing loan can be financed for the construction of buildings, while a mortgage loan cannot accept as a mortgage which does not exist yet. That in theory because in practice things are changing so that the mortgage loan is granted including for the construction of housing so the differences remain only in principle.
Advantages and disadvantages
The mortgage loan is the simplest option for those who have not owned a home and have the amount needed for the advance. There are options at some banks when the real estate credit does not necessarily require an advance, so this is an advantage, primarily for those who already have a house and want to buy another property, which was later a rented one . They can endorse the apartment that they have and buy houses with the amount obtained, but they also can take credit if another person endorses the apartment. On the other hand, is important because it does not mean the alienation of a home to acquire a larger one , but allows its mortgages and getting the money difference for the new investment .
In terms of required insurance, concerning the mortgage ,insurance of the building and life insurance are mandatory, while for loans some banks have become more permissive, unsolicited life insurance. There are banks where the life insurance is free. In fact, these banks ends a life insurance policy for the client and the insurance cost is included in loan fees.