With the change of year come new projects and one of them may be buying your first home or refinancing an old loan with better conditions. Therefore, we want to tell you more in detail about endorsable mutual mortgage credit. What are the differences with the non-endorsable and what type of entities grant it.
What does endorsable mutual mean?
An endorsable mutual mortgage loan is a money loan that can be accessed to expand, repair or build a property; It can also be used to buy a ready-made home, an office or a commercial premises. Another of the features it has is to refinance another credit that you already have. The sum of money that is granted is in units of promotion or in pesos. In addition, these loans are guaranteed with a mortgage on the property.
Endorsable mutuals are delivered by Endorsing Mortgage Mutual Administrators ( know which are certified to operate in this way by the Financial Market Commission ( CMF ). Some of the agents are the Family Allowance Compensation Funds ( CCAF ), nonprofit corporations that can give endorsable mortgage loans to their members. For their part, financial entities can also grant this type of credit, but they are supervised by the Superintendency of Banks and Financial Institutions ( SBIF ).
These institutions are the ones in charge of administering the endorsable mutual
- Make the monthly collection of fees.
- Respond to debtor inquiries.
- Report on the particular issues of the credit.
- Maintain updated and detailed information on endorsable mutuals (unpaid balance, unpaid dividends, collection status, among others).
In order to manage endorsable mutuals, a contract is generated that is extended through a public deed where an endorsable authorized copy is generated.
Differences of an endorsable mortgage loan and a non-endorsable one
In an endorsable mutual mortgage loan, the conditions are supported by a public deed, and can be endorsed or sold to third parties for financing, this buyer becoming the creditor and responsible for the mortgage loan. The fact that it is endorsable, refers to the fact that the entity that granted the loan has the right to transfer it, by means of an endorsement to a third party.
The interest rate on endorsable mutuals can be fixed or floating and must be reported by the Central Bank or the Superintendency of Banks and Financial Institutions. These loans are delivered to be repaid in not less than one year and not more than 40 years. The money loaned may also not exceed 80% of the appraised value of the property offered as a guarantee. In relation to non-endorsable mutuals, the bank finances the mortgage loan with its own resources, and unlike the endorsable mortgage, it cannot be endorsed or transferred to a third party. Its conditions are circumscribed by Law 18,010 on money credit operations and the General Bank Law.
Precautions and Warnings for Endorsable Home Loans
Before requesting a loan, it is necessary to take into account some tips:
- Compare the costs and benefits of the mutual with other financing alternatives.
- Evaluate the products, services or insurance attached to the loan to discard those that are not necessary.
- Ask the granting agents about the characteristics of the loan. In case of doubts about the characteristics or conditions of the endorsable mutual, request a detailed explanation, including the effects that the signing of the documents will have.
- Don’t make commitments without first reading and understanding what you sign.
- Make sure to take away all the doubts about the obligations that you will have to fulfill and that are appropriate to your budget. Also find out about the credit conditions, payment term and interest rate.
Other Endorsable Mutual Mortgage Expenses
At the time of requesting the loan, in addition to the debt generated by the mortgagee, you must incur the payment of the so-called “operational expenses” which consist of the following concepts:
- Stamp and stamp taxes.
- Notarial charges.
- Registration rights in the Real Estate Conservator.
- Fire insurance premiums and credit life insurance.
- Other insurance and additional clauses agreed upon by the parties.
- Expenses of first appraisal of the mortgaged property.
- Study of titles and writing text writing.
- Mortgage cancellation and lifting expenses.
The expenses indicated, except for insurance, can be included in the amount requested in the mortgage loan, as long as you accept it and the total amount, including the loan, does not exceed 80% of the appraised value of the property.
Mandatory insurance on endorsable mutual mortgage credit
When you request a credit, you must always pay certain insurance that allows the grantor to be covered by anything. So the minimum insurances to contract are the following:
- Fire insurance.
- Credit life insurance .
Now that you know what types of credits exist and which one suits you, we invite you to enter Compare and quote the best options for you.