Line of credit or credit on the security: right choice
Owners of real estate now have a choice possibility between mortgage loans or mortgage lines of credit. The real estate can is pledge for receiving the finance demanded for a construction or repair, conducting business, repayment of a financial duty on study or treatment payment etc.
More often banks propose marriage in 2 options of issue of the loan: lines of credit, mortgage.
In what distinctions?
Lines of credit are forms of the mortgage lending which system is similar to credit cards. The line of credit allows to take money in parts according to real need. For example, for payment of quarterly or monthly contributions for study, upon transition to a new stage of a construction etc. Usually such payments make every month, thus often there is a probability of registration of the contract in such a way to take money in different quantity, for example, if you know that in a certain situation the sum which is strongly exaggerating the standard can be necessary to you.
At registration of the credit for repair of a bathroom it is possible to buy at once the mixer for a bathroom and other bathroom equipment.
Mortgage lending gives the chance disposable removal of money. Thus, if you near at hand have a real estate which price quite strongly exaggerates the mortgage sum, the same real estate can be pledge for registration of one more mortgage. However, thus data on your payment ability, on your credit history, on the price of pledge and some other aspects will be already considered by bank on new conditions. Often the borrower at all does not know about all nuances which should be considered in a similar situation.
The mortgage on the security, especially if pledge is real estate, gives the chance to issue the necessary sum under smaller percent, than when using a credit card or when receiving a mortgage without pledge.
Thus all banks have the tariffing on each of the told options. As a rule, these aspects should be looked through with the representative of bank separately.
Often the mortgage on the security of real estate is made out for delivery of finance on conducting business. Therefore in some states the legislation provided reduction of a rate of a tax, which обкладывают real estate.