It may seem odd that a mortgage loan has nothing to do with buying a house. Buying a house is just one of the purposes of such a loan. Many people use this type of loan for different reasons depending on their needs and financial situation.
Home mortgages, which are used for “house buying loans” (which is also known as prstamos para comprar casa in the Spanish language), are the type most people are familiar with. Usually, someone becomes a home buyer because they want to stop wasting money, pay rent, and build property.
Buyers usually prefer 15 to 30 year loans with the lowest down payments and monthly rates. This type of loan is strongly encouraged by real estate agents and mortgage lenders because of the high fees and interest payments they receive for processing loans.
A refinancing mortgage loan is also very common, although it has nothing to do with buying a home. In fact, it is usually more to do with maintaining an existing house. When people struggle to pay off their mortgages, or when mortgage rates have fallen, people often call their lenders and ask for mortgage refinancing.
Sometimes a new lender will propose to a homeowner to refinance an existing mortgage loan. Smaller monthly installments are usually the goal of this type of loan. This can be achieved by lowering the interest rate or extending the loan term by several years. Extending a loan can reduce monthly payments, but also drastically increase the total interest paid, so it should only be used as a last resort.