If you need extra funds to build your own home, the most appropriate loan in this situation would seem to be a mortgage. Mortgage loan is intended for the purchase, construction, renovation or improvement of a new home, as well as other large purchases, so its general terms, possible amounts and repayment terms are suitable for anyone who has decided to build a home, but their own financial resources are not enough.
A mortgage is a long-term loan that is issued against a real estate collateral.
In the case of a mortgage loan, the pledge is a real estate that is already in the possession of the debtor, is planned to be purchased or built. In the case of a mortgage, a mortgage on an existing or future property remains in the creditor’s possession until the borrower has fully repaid the loan.
Prior to the issuance of a mortgage loan, the potential client’s indicators such as income and often the income of the guarantor or co-borrower, the credit history, the purpose of the loan and the collateral offered are evaluated. The maturity of this loan is determined by the borrower’s monthly income and solvency to cover the monthly loan payments.
The borrower has the opportunity to choose a falling or equal monthly payment schedule. Interest rates on this loan are calculated on the basis of the floating interbank and bank set rate, which in turn is calculated taking into account the borrower’s and his family’s income, the borrower’s credit history, previous cooperation with the particular bank, as well as the market value of the collateral.
In Latvia, mortgage loans are issued by commercial banks have separately dedicated the construction of a home as a mortgage loan. Krediidipank’s bank finances up to 85%, down payment from 15%, maturity up to 30 years, minimum amount is 25000 EUR. Eursa bank funding is up to 70%, down payment is 30%, maturity up to 40 years, minimum amount is 2800 EUR. Swedbank bank funding is up to 70%, down payment is 30%, maturity up to 30 years, minimum amount not set. If you would like to apply for a loan for housing construction, you can contact these banks.