Mortgage: How does it work?
Mortgage is a guarantee for the bank against the risk of non-compliance by the borrower because the risk is made, the Bank is authorized to take possession of the property and recover its claim by the product of its resale. First of all the deed, to be valid, must be signed before a notary.
Mortgage: Legal definition
In legal language, is defined as a “security interest ” (Civil code). “Real ” In the sense that this warranty is based on a material good, in this case a property.
In the real estate sector, is to allow the lender (the bank) to seize the property financed in case of non-compliance by the debtor (= the borrower).
know even more reading the “Mortgage Loan” newsletter for more information.
Article 2395 of the Civil code.
Above all it establishes that the mortgage “is or is legal, judicial or conventional “. In the case of a mortgage, = is conventional to the extent that the borrower has voluntarily lent his consent but how does it works mortgage?
Also it is normal for banks to ask for an endorsement when = is formalized.
This endorsement acts as a guarantee, that is, if the debtor does not have the necessary solvency at a given time, ie, can not pay the = fee.
How can you calculate the morgage quotas?
In order to calculate the mortgage quotas the German and French depreciation method is usually used, the most common being the French depreciation model.
French amortization method. In this case, most of the loan interests are paid to the bank during the first instalments.
that if at any given time decided to return all the outstanding debt to the bank.
most noteworthy with this method the fee payable will be the same, as long as there is no review.
German amortization method.
The quotas always vary, although the part of the principal that is paid is the same, when calculating the interest on the outstanding capital the total of the quota varies.
The fee that you pay will be every time monthly.
Above all agencies advise that the amount of the mortgage share is not greater than 30% of the income.
Good to know: the mortgage should not be confused with the “Denier lender Privilege” (PPD) Because these are two types of guarantees that are close but different.