Payment by installments or mortgage? What it is more favorable?
In spite of the fact that the state yet completely endured an economic crisis, the market of residential real estate prospers. New multi-storey buildings are erected, and apartments in them are bought up with huge speed. It is not casual. After all people build new families, get children. Somewhere it is necessary to live. Only small percent of citizens camps have good money and presume to acquire housing without special problems. The rests should use various financial institutions. Mortgage lending is today rather popular. The mortgage is an excellent exit for those who has no huge sum of means for real estate acquisition. But to connect itself obligations are ready not all. After all it is necessary to pay monthly in a current of long term to bank payments. As a result the overpayment can equal to one more apartment. It is not absolutely favorable.
Payment by installments can become one more exit. Many consider that between a mortgage and payment by installments practically there are no distinctions. But it not so. After all in both cases it is necessary to pay monthly payments and in the beginning to bring advance payment. But differences nevertheless are, and they essential. Payment by installments is presumed not by everyone. If advance payment under the mortgage contract can not exceed 15 %, payment by installments assumes introduction of the sum of advance payment at the rate about 50 %. Some organizations demand to bring advance payment at level of 70 %. It is the huge sum of means.
One more difference is the interest rate under the contract. Various financial institutions establish different rates under mortgage contracts. Often they do not exceed 20 % per annum. With credit reduction, the sum on percent decreases also. The contract on payment by installments can not provide at all an annual interest rate. It turns out that the overpayment on payment by installments can be equal to zero.
Payment by installments usually pays off for some years. It is excellent option for those who did not manage to collect yet the sufficient sum of funds for the desirable apartment in a new building.