Mortgage or loan: what is the most convenient choice?

Mortgage and loan are the two main financing instruments for buying or renovating a home. But what are they different? And what is the most convenient solution to carry out your project? Let’s find out the main differences between these two possibilities and everything you need to know to orient yourself in the choice.

What is the mortgage? Features and benefits

What is the mortgage? Features and benefits

The mortgage is a form of financing that offers high amounts, to be repaid in medium-long times. For these reasons it is generally required to buy a house or to undertake burdensome renovations. Delivering large sums, the mortgage imposes guarantees and has a longer and more complex bureaucratic procedure than other credit solutions.

Let’s see what are its distinctive elements:

  • Possibility to request large sums ;
  • Medium-long duration, which can reach up to 40 years;
  • Bound to the purchase of a specific asset, to be indicated during the preliminary investigation phase;
  • It provides for mortgages on the property or on other properties, and can oblige the appointment of a guarantor ;
  • Subject to various ancillary costs (preliminary investigation, notary fees, appraisal…);
  • Long delivery times compared to other credit systems;
  • Possibility of deducting part of the interest paid from the taxes.

What is the loan? Features and benefits

What is the loan? Features and benefits

The loan is a financial instrument that allows you to get from 5,000 to 75,000 USD, to be repaid in maximum 120 months. It is a more agile and faster solution, used to meet different needs. On the housing front, for example, loans can be requested for home renovation, loans for maintenance or for the purchase of furniture and appliances, also taking advantage of the tax benefits of Ecobonus.

Let us briefly summarize the characteristics of the loan:

  • Up to 75,000 USD ;
  • Shorter duration: maximum 120 months (10 years) ;
  • It is not finalized, ie it is not necessary to justify the request;
  • There are no mortgages or guarantees;
  • Has incidental expenses ;
  • It’s fast : delivery times usually range from 15 to 30 days.

Mortgage or loan? The elements to consider in the choice

Mortgage or loan? The elements to consider in the choice

If the amount to be requested does not exceed 75,000 USD the loan is almost always the best solution. When credit is needed in a short time, perhaps in order to be able to start the construction work, the loans for the renovation of the house in fact ensure tight deadlines and leaner practices. We must also consider the economic convenience of the operation: if the loans are sufficient to count the APR, the costs of the loan are definitely higher and more complex to calculate, because they include notary fees and ancillary charges.

Other discriminating factors that should not be underestimated concern the possibility of offering guarantees or mortgages, as well as the weight of the installments and the duration of the plan. Loans with best bank, for example, they do not provide for the use of guarantors and guarantee fixed installments that are always in line with their financial needs, which can reach a maximum of one fifth of the salary or pension.

Loans for restructuring with best bank

Loans for restructuring with Spesk de Dalpo

The market offers different types of loans for restructuring, even non-finalized. Unlike mortgages, or other loans linked to specific purchases, to be indicated in the preliminary phase, unfinished loans allow the credit received to be spent in total autonomy, without any restrictions.

Among these we find loans with best bank reserved for employees and pensioners, which offer $ 5,000 and $ 75,000 at a fixed rate and numerous advantages:

  • Rapid delivery
  • No need guarantors
  • Insurance coverage included
  • Convenient return, through direct deduction on salary or pension
  • Light installment (never more than 20% of net salary)

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