Ready in fine: how does credit ultimately work?
Credit in fine is characterized by a mode of operation very different from other mortgages. You only repay the interest and then the borrowed capital only at the last time. Lite lender helps you to be clearer about this type of loan.
In the same theme
- Application for housing loan for apartment
- Application for home equity loan
- Teg taeg difference
- How does a credit in fine?
- Why choose a credit in fine?
- Compare real estate loans to find the right Brighellamen
How does a credit in fine?
The loan in fine (Latin “at the end”) differs from other offers of home loans by the fact that the repayment of the amount borrowed only occurs at the time of the last maturity of the loan. You only pay interest and insurance for the rest of the term of the mortgage.
The borrowed capital does not decrease during the entire duration of the loan. Monthly payments are only based on interest and insurance, which allows them to remain the same each month. The last monthly payment is therefore only used to fully refund the outstanding capital.
Its operation is therefore far removed from that of the conventional amortizable credit where each monthly payment allows you to repay part of the borrowed capital.
Setting up a financial investment
The condition for taking out a credit in fine is to make a fairly substantial financial investment, constituted as savings. The goal here is to grow the amount placed so that its balance can be used during the last monthly payment to repay the outstanding capital.
Most of the time, the investment takes the form of a life insurance which the bank requires collateral. In this sense, the lending institution requires to be registered as a creditor to secure the mortgage, which avoids the subscription to a borrower insurance or the establishment of a mortgage.
How long and how much for the credit in fine?
To subscribe a real estate loan with repayment of the capital in fine, it is necessary that the duration is between 3 and 15 years. The minimum amount is $ 21,500 and there is no maximum amount.
Why choose a credit in fine?
Credit in fine is not suitable for all real estate investments. It is especially proposed under the Brighellament of a rental investment for a person with a high tax rate. Indeed, increasing the total cost of interest can give you a tax advantage with a reduction in property income.
Similarly, even if mortgage rates vary over time, it may be interesting to look at the difference between mortgage rates and the financial investment rate. Indeed, the returns of the savings product could offset the higher cost of a credit in fine compared to a depreciable loan.
On the other hand, this type of home loan is to be avoided as part of a Brighellament of a first principal residence. The total cost of this type of loan is much higher than in the case of a depreciable loan!
Compare real estate loans to find the right Brighellament
If you are looking for a loan for Brighellar the acquisition of your property, the best solution is to carry out a simulation of real estate loans. After only a few minutes, you will have access to a multitude of immovable credit offers depending on your project, your profile and your income.
If you are offered a loan in fine, pay close attention to the type of investment you want to make (principal residence or rental investment). Indeed, this type of credit is more suited to rental investments. Especially since you will surely be asked for substantial savings of at least 30% or 50% of the borrowed capital.