Do you know enough about mortgage loans in Guatemala?
One of the most listened terms in the financial world, but of which few have detailed knowledge, is the word mortgage. Surely you will have some doubts, so next we will explain everything related to this topic.
What is a mortgage?
Financially, the word mortgage is defined as the loan made by a bank to a person or company and for which the entity only accepts as payment guarantee a property or a property of the applicant. Normally, banks only grant mortgage loans for 80% of the total value of the property you offer in the loan process.
Once the loan amount has been agreed on the value of the property, the two parties must establish a document with the agreed terms and conditions for the mortgage. Once said negotiation is completed, it must be legally indicated in the Land Registry.
In case of non-compliance with a certain number of payments established by the mortgage, the bank must resort to a legal process of loss of the good by the applicant, and this procedure is known as foreclosure.
What documents do you need to mortgage a property?
Each financial institution has a different procedure to start the mortgage management, but the documents that are generally requested are:
- Original title of the property to be mortgaged.
- Copy of the title of the property signed and stamped by a notary.
- Documents signed with the bank to request the mortgage.
- Proof of income issued by the company in which you work.
- Bank account statements for the last three months.
Can you mortgage a mortgaged asset?
In addition to the mortgage we are talking about, there is also the so-called second mortgage or Junior-lien. This is a type of bank loan where money is granted to the person concerned, using a property as collateral, even if you already have a loan on that asset.
Within the previous types of mortgages there are three types of interest rate: Fixed interest rate:
The interest rate and payments agreed upon at the time of negotiation with the bank do not vary during the life of the loan.
Variable interest rate:
The interest rate and payments to be made may vary. Each financial institution makes the decision to do it monthly, quarterly, semi-annually or annually. In some cases you can pay more than you had agreed in the beginning.
Mixed interest rate:
The interest remains fixed and in most cases it is greater than one year, from there it can vary depending on external factors.
What can you mortgage?
- A real estate.
- Previously mortgaged assets.
- The rights of surface, pastures, water, firewood and other similar nature.
- Administrative concessions of mines, railroads, canals, bridges and other works destined for public service.
- Buildings and land.
- The floors or premises of a building in a horizontal property regime registered in accordance with what is determined by law.