Mortgage loan: advantages and disadvantages

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Mortgage loan: advantages and disadvantages

Is putting your house or apartment as collateral to get your loan worth it? The mortgage loan is taken out by people who have substantial  real estate

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Is putting your house or apartment as collateral to get your loan worth it? The mortgage loan is taken out by people who have substantial  real estate assets  with the aim of freeing up liquidity from it, without having to sell. The more wealth you have, the more attractive the mortgage becomes. Let’s take a look at its advantages and disadvantages:

Benefits Disadvantages
  • the mortgage loan allows the borrower to benefit from a high debt capacity .
  • the repayment periods are long: they can go up to 30 years.
  • the loan can be used to finance any kind of good, and even serve as consumer credit
  • early repayment is possible with this type of loan, and does not necessarily result in penalties).
  • putting your property in mortgage is a costly operation. In addition to the notary’s fee, it is necessary to provide:
    • land registration tax,
    • curator’s salary,
    • ancillary costs, etc.
  • the release of the mortgage causes costs , which are the responsibility of the borrower.
  • any default in payment results in the seizure and resale of the property for the benefit of the bank, without the borrower being able to find fault with it. 

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