If you arrived on this page, it is very likely that you are looking for a soft loan and want to understand better if mortgage loans can be a profitable solution. Of course, the many information you find on the net are often contradictory and frequently want to convince you of something that is not yet clear to you.
Do not despair, continue reading and you will find out how easy it is to assess whether or not this type of home purchase loans are beneficial to you!
Mortgage loans are loans for the purchase of a building under construction or already completed
They can be used for the purchase of a first home, with related tax deductions, and are distinguished in practice from building loans , although according to current legislation there should now be no more differences between the two instruments.
A mortgage is a medium or long term loan secured by a first degree mortgage on the property. Let’s see what it means and what are the particularities of this form of credit. The fact that the loan is “medium or long term” implies that the contract expiration is always longer than 18 months: this means that the full repayment of the loaned capital cannot take place before a year and a half from the signing of the contract.
In addition, the mortgage loan requires the bank to request a first grade mortgage on the property subject to the loan. In this way, the credit institution has a significant guarantee in the event of non-payment by the borrower. It is then a particular mortgage, as defined as “first grade”: this means that in the event of payment difficulties, the bank will be the first creditor to be able to make repayment on the debtor, triggering the mortgage on the property. The credit institution will therefore take precedence over any other creditor. Finally, the mortgage loan can only cover up to 80% of the property’s value , differentiating itself from other loans (sometimes known as “100% mortgages”). However, all these features make this type of loan safer for the bank and therefore interest rates are usually lower than other types of loans.
The land loan is therefore aimed at citizens who intend to build or buy a property
In this it differs in practice from building loans, which instead, although subjected to the same legislation, are more directed towards construction companies. For this reason, a mortgage is disbursed immediately, while the capital of the building is delivered to the company as the work progresses.
As with all loans for the purchase of a first home, tax deductions are also provided for mortgages, such as that on interest payable on the loan. To enjoy the deduction, it is necessary to declare the interests in the 730 form and that in the loan contract it is specified that the financing was aimed at the purchase of the first home.