Processing a home loan can be the answer to how to buy a new home , however, along the way there are many terms that can be somewhat confusing, so we leave you a list of some of the most important.

1. CAT (Total Annual Cost)

It is an indicator of the total cost of credit financing, it is expressed as an annual percentage and incorporates all the costs and expenses inherent to the credit . It is used  to compare how expensive a long-term loan is, as it includes interest rates, annual fee, commission for opening, insurance premiums, among other expenses. 

All banks and financial institutions calculate the CAT with the same formula, which makes it a reliable indicator to compare and find the best option. The rule of thumb is "the lower the CAT, the less expensive the credit."

Read more: 5 signs that show I'm ready to buy my first home

2. Interest rate

It is a percentage of the total amount of credit that must be returned to the institution that grants it, that is , it is the price of the money , or a payment for receiving the loan. This can be fixed or variable, depending on the institution with which you carry out the procedure.

 Sky Marketing strives to be Pakistan's biggest real estate developer ever, guaranteeing the highest international standards, prompt execution, and lifetime customer loyalty. With projects like Tajarat

3. Mortgage credit

Loan for the purchase or remodeling of some construction, usually housing. Its main characteristic is that the property will remain in guarantee (mortgaged) in favor of the bank or institution to ensure the payment of the loan, this type of credits are usually medium or long term for the amounts that are handled.

How does a mortgage credit work? Each financial institution handles different options, but we can talk about some characteristics in common, for example that a series of requirements must be met and based on them it is decided whether or not the credit is approved, as well as its amount.

Request a mortgage credit counseling here

4. Infonavit CreditIf you are listed on Infonavit, you have the right to request a loan once you have accumulated 116 points in your Housing Sub-Account, it can have different purposes; buy new or used home, build, repair, expand or improve your home.To know the conditions of your credit you must carry out a prequalification where your age, salary, score and time that you have been contributing is taken into account. Something important is that this home loan applies to all salary levels and has a fixed annual rate of 12%.

Do you want to know the status of your Infonavit credit? Request a free prequalification here

5. Housing subaccount

It is the money that you have accumulated throughout your working life , it is made up of the bimonthly contributions made by your employer and corresponds to 5% of your integrated monthly salary (sum of your net salary plus benefits such as Christmas bonus and vacation bonus). For example, if you contribute with a monthly salary of $ 12,000, 5% of this amount is $ 600, so every two months $ 1,200 should be credited to your Sub-Account .

When applying for an Infonavit loan, this savings is automatically used, you can also add it if you apply for a bank mortgage loan that is affiliated with the institution. In case you decide not to use it for housing, you can request the savings for your retirement.

6. Credit Fovissste

The Fovisste is an institution in charge of granting  housing loans to workers at the service of the state . It offers different modalities because they seek to cover different needs, although the most common type is traditional credit, which is accessed through a lottery among active workers and based on some government agency.

7. Marital mortgage credit

This is granted to couples who have the common objective of buying a home to share, for many it is the best mortgage loan because it gives the possibility of joining the credits of both and increasing the total amount of the loan to buy a better house, or pay lower monthly payments or decrease the total term.

Read more: 7 things you should know about the Infonavit marital credit

There are several institutions from which this modality can be requested and agreements can even be made between more than one entity to grant the loan, some of them are: Infonavit, Fovissste, banking and through a Sofol ( Limited Purpose Financial Company) .

8. UMA (Unit of Measurement and Update)

An Infonavit credit can be granted in pesos or in UMA's , this concept was created to replace VSM (Times Minimum Wage) and is used as a reference to calculate the payment of housing contracts, surcharges, fines, benefits, etc. Its value is updated annually according to inflation, it is for this reason that many recommend acquiring credits in pesos to keep the debt fixed.

What did you think of these terms? Hopefully they have been useful to enter the world of mortgage loans. If you still have more questions, we invite you to download the Guide to buying your first home for free by clicking on the button below to find out more information.

Resources:

Harry Potter could return in serial form to HBO Max

voguemagz

skymarketing

skymarketing

skymarketing

Patterjack Terrier

bed for a puppy?