A mortgage taken to buy a flat or house is a commitment for many years. For a real-estate investment to be profitable, it’s worth taking a close look at its costs and what installments you’ll pay.
The real estate market has been booming for several years, which is why most of the investments in this market are profitable, and the profits will bring in the short or long term.
The essence of the mortgage
Mortgage loans are granted by banks for the purchase of an apartment or house. Most often these are high-value loans granted for a long period of time, 10-30 years. Until the debt is paid off, the bank owns the property. And basically all the cons of the mortgage. The advantages include:
• possibility of quick investment implementation,
• a short period to collect the keys to your own apartment.
A mortgage can also be a good financial investment. This situation occurs when we use it to buy a flat to be rented. Rent rent not only covers the costs of the loan installment, but usually allows you to make a small profit. After repayment of the loan, the profit is much higher and amounts to approx. $ 2,000, depending on the apartment standard and location. When deciding on such an investment, it is worth considering carefully considering whether it is better to buy a new or used apartment.
A mortgage is a high loan taken from a bank for a long period of time. It is secured by a real estate mortgage. In practice, this means that until the property is repaid, the bank owns it. The total cost of the mortgage is influenced by several factors, such as the amount borrowed, the repayment period and interest. For more on this topic, see this article.
Borrowers usually face a dilemma which loan installments to choose: fixed installments or decreasing installments. There is no simple answer. Each of these variants has its pros and cons. When preparing to wind up for a loan, it is worth analyzing and calculating the loan installment carefully. For this purpose, you can also use credit calculators that are available online.
Advantages and disadvantages of equal loan installments
The main advantage of equal installments is the possibility of adapting them to the possibilities of the household budget. Equal installments also allow for granting loans with lower creditworthiness. The biggest disadvantage are the high costs resulting from the structure of installments, the majority of which are interest.
Advantages and disadvantages of decreasing credit installments
The basic part of the decreasing installment is the capital installment, which reduces the amount of debt and interest owed to it. In practice, this means that the first installments are high, while the next ones are getting lower. In addition, each installment reduces the amount of debt, and thus the amount of interest. As a result, decreasing installments allow for a significant reduction in mortgage costs, even by tens of thousands of zlotys.