Mortgage banks is an entity that can grant you a credit or a loan if you have real estate that supports the operation.

Before granting a money advance, banks analyze the financial situation of the applicant to minimize the risk of losses, but if you have a property as collateral, the bank has the peace of mind it needs to grant the financial product.

You never know when you may need financing to start an exciting project or buy a vehicle that you need for work or your personal life.

We all know that there is the option of requesting a mini-credit or a quick loan that would reach your account in a few minutes, but the amounts of these financial products are usually very low, so you should consider the option of resorting to mortgage banks .

What is a Mortgage Bank ?

What is a Mortgage Bank

It is an entity that can grant you a credit or a loan if you have real estate that supports the operation.

Before granting a money advance, banks analyze the financial situation of the applicant to minimize the risk of losses, but if you have a property as collateral, the bank has the peace of mind it needs to grant the financial product.

You never know when you may need financing to start an exciting project or buy a vehicle that you need for work or your personal life.

We all know that there is the option of requesting a mini-credit or a quick loan that would reach your account in a few minutes, but the amounts of these financial products are usually very low, so you should consider the option of resorting to mortgage banks.

This entity has the capacity to grant credits and loans with mortgage guarantee. The operation consists of using a real estate that you own as collateral so that the bank has the guarantee that it will not have losses if you do not comply with the repayment of the loan.

This operation is very common, so much so that for a century the mortgage bank of Spain has been operating , an institution that ceased to exist during the 1990s.

If you want to know how to use your assets to obtain a loan of large amounts, understand what is the way of acting of the mortgage banks, their characteristics and all the possibilities that are open to you and have enough information to decide clearly, stay in this Article.

How Does a Mortgage Bank Work?

The nature of this entity is to grant credits or loans with a mortgage guarantee. These types of banks have a long history and have been operating for centuries and their objective is to increase production by issuing financial products that represent an advance of money protected by a property of the beneficiary.

The mortgage banks s act by issuing mortgage bonds are securities issued by an entity and used to recognize an obligation to pay back that has as a property of the debtor. It also creates savings bonds and savings deposits that are intended to achieve liquidity.

Nowadays, mortgage banks have stopped acting, but commercial banks have taken over and are in charge of performing these functions, in fact some very powerful entities have absorbed this type of banks with the idea of ​​increasing their offer and growing by adding users to your customer base.

What are the characteristics of mortgage banks?

At first glance it may seem that the mortgage bank works in a very similar way to conventional entities, but its features indicate that sometimes they have nothing to do with it.

In the first place, because the objective of the mortgage company is to grant loans to build, reform or expand a real estate that can be a house or even a plot of land, there are no distinctions.

They also accept deposits of mortgage loan participations by creating special accounts and carry out all operations with a guarantee that backs them up.

Another aspect that differentiates them is that they are able to obtain loans that come from abroad and even act as credit intermediaries between those obtained with foreign and national currency .

In addition, they are in a position to issue bonds and make investments in assets that generate short-term profits. You must not forget that it is an entity that aims to obtain an economic benefit and that you must comply with the established agreements, otherwise you run the risk of losing a property of great value.

Where can I find all the information?

Where can I find all the information

Currently all entities have a web page that describes their origin, their way of acting and their best offers.

There is no single page for mortgage banks as such because this institution has already disappeared, but there is the option of contacting traditional banks or asking the entity where your accounts are located if they offer this service.

Is it possible to get a mortgage loan without commissions?

A mortgage is a loan that allows you to finance the purchase of a home. It is one of the most common forms of financing in Spain, it is offered by all banks and they know that good conditions are a sure source of customers.

With the high price of the real estate market buying a house in one go is practically impossible and only through this type of loan can the investment be made.

We all know that banks do not like to take any type of risk and that is why before granting any advance they ask for documents such as payroll, employment contract or income statement.

But this situation does not occur with mortgages since the entity uses the financed home as collateral in case you do not comply with the repayment of the loan.

In the mortgage loan, the entity advances the money for your home and you return it month by month through installments that include interest that represents a benefit for the bank.

But this product includes a series of extra expenses that inflate the operation such as the Tax on Documented Legal Acts or notarial fees.

Commission Set by Mortgage Banks at Opening

Commission Set by Mortgage Banks at Opening

It is fixed by the simple fact of starting the operation. You may also have to face late payment interest, but this will only happen if you are late in paying your fees.

The fact that there is strong competition is always an advantage for the client of an entity, this has caused that some mortgage banks can grant a mortgage without commissions in which the opening one disappears. Normally this offer is published by entities that have been operating for a short time and want to increase their client portfolio.

The rise of digital platforms has benefited the consumer, the fact that these websites have removed customers from mortgage banks has caused them to be more flexible in their conditions to grant loans or mortgage loans.

Many entities are changing their way of operating and have created online banking and very powerful applications, but above all they have launched offers that allow the user to obtain a very interesting product at a very low cost and reducing the paperwork they had to present years ago .

Do I assume a risk when contracting a variable mortgage?

A very common product offered by banks is the variable mortgage , it is a mortgage loan in which the amount of the monthly installments varies according to indicators such as Euribor.

It is a reference index that is published daily and that establishes the average interest rate set by European banks on the short-term loans they grant.

The interest rate for variable mortgages is made up of the Euribor value plus a fixed spread. Banks normally update the interest rate every six months based on the value established by the Euribor.

This means that during this time the same monthly installment is paid, but once this period has passed its amount may go up or down, for this reason this loan is called a variable mortgage.

Fixed mortgages represent a totally opposite case, the interest rate is the same during the term of the loan, and this figure is not subject to any type of index.

The great advantage of this type of mortgage loan is that it gives you a unique peace of mind and it is not necessary that from time to time you have to read the economic salmon-colored supplements of the newspapers or live with the tension of not knowing if your bank is going to give joy with the drop in the quota or annoyance at the rise in it.

Intermediate Point With the Mortgage Bank

It may happen that neither fixed nor variable mortgages convince you and in these cases mortgage banks give you the opportunity to take out a mixed mortgage. This type of loan combines the operation of the previous two. Its conditions vary according to the term of the loan .

A very common case is that in a 30-year mortgage, a fixed installment is paid for the first 10 years and a variable interest rate is applied for the remaining 20 years, taking the Euribor as a reference.

Although before contracting this loan , it is recommended that you speak with your mortgage bank, resolve all the issues and carefully read the fine print of the contract to avoid that a rise forces you to make a monthly effort. It is also convenient that you analyze your financial situation before making any contract.

How can I contact a mortgage bank?

Information is a fundamental aspect that must be taken into account before contracting a financial product. If you are considering obtaining money using one of your properties as collateral, it is best to contact your usual bank.

Let’s see if it can offer you this service and under what conditions so that you can assess whether it is convenient for you or it is better to study other options.

If the answer from your bank does not convince you, it is best to turn to the internet. A large number of mortgage banks. Some of them of Latin American origin, have understood that the network is a good niche to get clients.

And they have very up-to-date websites where they explain all the conditions of their loans and offer a customer service that works effectively to resolve any questions that may arise.

Physical Branches or On the Internet.

This type of mortgage bank offers you the possibility of taking out loans and making  payments with credit or debit cards . They send you to your home mailbox along with a letter explaining how to use them and the limitations they have.

Although, if you have contracted a credit one, you should not forget that you have to keep an expense control since the purchases you make will not be charged to your account until the following month.

Another possibility that they offer you is to invest in fixed and variable income products, you can also make transfers, check your balance and latest movements through an application or direct payroll and use the account created to pay taxes.

If you decide to operate with a mortgage bank, it is very likely that you will have to carry out purchase and sale operations in a currency other than the euro.

In this case, you need to compare the value of both currencies and analyze whether the operation is profitable for you. The same happens if you want to open a savings account by entering dollars instead of euros.

Being a client of a foreign bank?

Being a client of a foreign bank

With the internet, paperwork and bureaucracy are no longer a problem. Being a client of a national or foreign mortgage bank is very simple, you just need to register on the web and answer an online test that includes a series of questions to evaluate your financial situation.

It is also necessary that you provide a series of personal data such as the National Identity Document (DNI) and read and accept the terms and conditions.

It is essential that you take this step into account and confirm once you have evaluated everything that appears in this agreement to avoid problems. Finally you must create a username and password, provide your phone number and email and start operating.

Final summary: Mortgage banks are entities that grant money advances in exchange for leaving a real estate of your property as collateral.

This offer is very interesting to obtain financing and although these types of banks do not operate with the intensity of years ago, you have the option of contacting your entity or looking for this service in banks that operate online.