Loan or Mortgage: what is the best home improvement loan?

Buying or renovating a home is everyone’s dream, but in most cases it is difficult to get the entire sum and it is necessary to ask the bank for money.

This can be done in two ways: with a loan or with a mortgage. But what changes?
Here are 5 tips on what to choose as appropriate!

The loan

The loan

The loan is a category of contract that provides for the repayment of sums with a fixed interest rate. The sums paid in most cases reach up to $ 75,000 and the amortization plan is shorter than the mortgage.
Unlike a mortgage, the loan is generally easier to obtain, less guarantees and sometimes no guarantor are required. With the Cession of the Fourthe, for example, you don’t need a guarantor and you don’t have to mortgage the house. Furthermore, when requesting the loan it is not necessary to indicate the reason for which the money is being requested.

Request a quote now for a loan up to $ 75,000 without guarantors. It’s free and without obligation!

The mortgage

The mortgage

The loan is a contract in which very high amounts can also be paid. It is a finalized loan, therefore it is necessary to indicate the reason for which the money is requested, which must then be used in the way indicated. The amount obtainable depends on the price of the house, or on the cost of the renovation, and on the economic resources of the applicant. It is also possible to choose between a fixed rate mortgage or a variable rate mortgage.
To be able to access the loan, it is necessary to provide important guarantees. Often it is not enough to mortgage the property you buy, or other property, and a guarantor may also be required.

What to choose?

What to choose?

Once the characteristics have been established, it is possible to give some advice on the choice between the two types of financing.

1) In case of home purchase, it is better to choose a personal loan when the amounts you need are not particularly high, perhaps because you buy a house in a small village. This is because the personal loan provides for less bureaucratic burdens and therefore is a lighter form of financing.

2) Always make comparisons through estimates of both the loan and the mortgage. Only in this way is it possible to evaluate the real savings that can be met by making one choice rather than another.

3) Always check all the items that make up the interest rate. Often the TAN can be deceiving and be much lower in the loan than in the loan: for this it is essential to take the APR as a reference, which also includes all the preliminary costs, the insurances that must be stipulated and the installment and notary fees.

4) In case of restructuring, choose the loan if there is no need for large amounts. It is in fact the fastest vehicle.

5) Before choosing the loan it is advisable to evaluate the tax benefits that can be obtained for a first home loan.