What is the difference between mutual mortgage and mortgage credit?

Those looking to buy a home have certain doubts about a mutual mortgage and a mortgage loan . So we offer what each one is about when buying a home .


What is the difference between mutual mortgage and mortgage credit?

What is the difference between mutual mortgage and mortgage credit?

Mortgage credit is a type of credit that allows you to buy an apartment or home . They are characterized in the form of a money loan granted by a bank under certain conditions; there are them in the medium or long term and that allow from buying, expanding, repairing or even building a home.

When applying for a loan, the home or apartment – as the case may be – is guaranteed or as it is called “mortgaged” by exercising the bank’s real right, this being the best way for entities to be able to ensure that their client complies With the payment of the credit.


Types of Mortgage Credit


There are several forms or types of mortgage loans, depending on their purpose:

  • Home Mortgage Credit: It is a home purchase credit
  • Mortgage credit general purposes: Type of credit that allows it to be used for the purpose that is within what refers to housing.
  • Self-construction mortgage credit: Type of credit that allows clients to use it for the construction of their home.


Mortgage loan costs:

Mortgage loan costs:

Mortgage loans carry a series of costs, in some cases, quite burdensome, as they are:

  • Stamp and stamp tax
  • Notarial Expense
  • Appraisal expenses of the mortgaged real estate
  • Insurance premiums
  • Study of titles and writing of writing
  • Registration fees in the Real Estate Curator


Mutual Mortgage

Mortgage loan

A Mortgage Mutual is a mortgage loan in which the financed property forms the loan guarantee. It is defined as endorsable, since after paying the seller, it allows to transfer the Mutual – that is to say endorse – to other Institutions authorized by law; These are generally life insurance companies. That is one of the main differences with common mortgage loans .


Endorsable Mortgage Mutual

mortgage loan

The Endorsable Mortgage Mutual is a mortgage loan to acquire, expand, repair or build a home; also allows to buy spaces, offices or commercial premises; In addition to refinancing mutual mortgages or loans for general purposes.

It is granted in development units (UF) or readjustment systems authorized by the Lifecore Bank. The terms and conditions are contained in a contract that has the nature of a public deed, can be endorsed or sold to third parties to finance, the latter remaining as a creditor of the mortgage mutual .


Who can access and so they can use it

money loan

They can access natural or legal persons and allows financing purchase, construction, expansion, repair of different real estate. In addition to refinancing and prepaying Mortgage Loans . Another difference with mortgage loans.


Types of Mortgage Mutuals

Types of Mortgage Mutuals

There are different types of mutual mortgage such as:

  • Endorsable Mortgage Mutual: credit destined for housing and general purposes.
  • Mutual Mortgage Plus: credit at fixed rates in UF, for terms of up to 30 years and flexible prepaid options.
  • Mutual Mortgage Variable Rate: at an annual variable rate based on the TAB UF rate of 360 days plus the spread agreed upon in the deed.
  • Mutual Mortgage Mixed Rate: initially at a fixed rate for 1 to 5 years, then at a variable rate based on the 360-day TAB rate.
  • Flexible Mortgage Mutual: allows you to choose each month between 3 term options.


What expenses does the Mortgage Mutuals entail

mortgage loan

The debtor when requesting a mutual mortgage , bears certain expenses called “operational expenses” namely:

  • Stamp and stamp taxes
  • Cancellation and mortgage lifting expenses
  • First appraisal expenses of the mortgaged property
  • Notary expenses necessary for the improvement of the mutual
  • Registration fees in the Real Estate Curator
  • Fire insurance premiums and relief insurance
  • Other insurance and additional clauses agreed by the parties
  • Study of titles and writing text

Mortgage loans are differentiated, then, by the type of document that originates the obligation to pay the credit. As we mentioned, the most common types of mortgage loans are the Letters of Credit or Mortgage and the Mutual Mortgage. The main difference, then, is that the Mutual can be endorsable by the bank, and the credit is not. Likewise, the Mutual carries higher expenses than the Mortgage Credit, although neither is cheap.