Do you know what a mortgage is? A mortgage is an item that the bank returns to you after you successfully repay the loan and interest after you borrow. Such goods can be contracts, or physical products and securities with prices.
Mortgage also has broad and narrow sense. Broad mortgage refers to any form of pledge and mortgage, of which pledge refers to chattel mortgage. In other words, the subject matter of mortgage in the broad sense can be real estate or movable property.
In the narrow sense, the subject matter of mortgage can only be real estate. The main reason for its loan is that the lender is about to buy a house.
So what channels can mortgage loan go through? Let's learn about it:
First of all, equal principal and equal principal and interest can be used.
Let's first look at the first method, equal principal. In fact, it has other names. People usually call it repayment of principal and interest. As the name implies, it means to apportion the principal to each month, and the borrower pays off all the interest on the last day. The advantage of this method is obvious, that is, its total interest is lower than the interest of the same amount of principal and interest, but the disadvantage is also reflected, that is, the borrower has to bear a relatively heavy responsibility for repayment at the beginning, but the responsibility and burden of the later period will gradually decrease with the time, reducing a little each month. In short, equal amount of principal is to divide the loan amount equally within the repayment period, and then repay the same amount of principal and remaining interest every month. Let's give an example to make it clear. If the loan is 1 million and the service life is 20 years, then there will be 240 months. 1 million divided by 240 equals 4166.67, that is to say, the monthly repayment of the principal is 4166.67 yuan.
There is also equal principal and interest. As the name implies, at the beginning of each month, the borrower should repay the total amount of cash to the bank. In this way, although it will not repay less and less amount as the same amount of principal, it will always repay the same amount of money. For the initial repayment burden, the repayment method of equal principal and interest is more suitable for people who are not so rich in finance. However, the obvious disadvantage of this method is that the borrower's final repayment of interest is higher than that of the equivalent principal. If the amount of funds borrowed is relatively large, the extra interest will naturally be more.
What is the difference between mortgage and pledge?
When borrowers choose different mortgage forms, they will face different interest rates. Generally speaking, the interest rate of mortgage loan is lower than that of pledge loan.
Loans are also used in different ways, and their maximum repayment periods are also different.
