Mortgage is a type of loan given either in exchange for real property (i.e. the property is given as a collateral) or for the purpose of acquiring, building, renovating or investing in real estate. Thus, if a buyer of a property receives money to buy a house, it is a mortgage loan. If a real estate owner puts a lien on his/her apartment (i.e. guarantees that the apartment will become the property of the bank, if the mortgage is not paid off) to receive a loan for any purpose - it is also a mortgage.

In Latvia bank and non-bank mortgages are available. Additionally, besides regular mortgage, it is possible for families with children to apply for a government-backed mortgage, in which case, if a loan cannot be paid back, it is covered by the government.

Refinancing
Mortgage refinancing is the procedure of receiving a loan in order to cover an older loan. The two primary reasons to refinance a loan is an inability to pay off the older debt or a new more advantageous offer, e.g. one with a smaller interest rate. In Latvia, this practice is not entirely new, but is mostly seen among private customers operating with small-scale loans. For larger loans and especially mortgage, it is highly advisable to hire a real property guidance agency, which will make the procedure as effective and e

Loan joining
Loan joining is a type of mortgage refinancing that joins two or more loans into a single one, usually with a new crediting institution. In addition to the regular refinancing benefits, such as more favourable interest rates and payment dates, it allows redirecting all the negotiations to only one institution. This is a very effective time-saving measurement, allowing you to spend less on paying off the loan, and more on caring about the actual investment strategy.

Bank and non-bank mortgage
Bank and non-bank mortgages differ in the institution giving out the loan. Naturally, each of the methods has it own advantages and disadvantages. While banks are able to provide more funds and offer generally lower interest rate, non-bank crediting institutions require less documentation and legal preparation, as well as they are more ready to negotiate, especially with customers with a less than perfect credit history. On the other hand, banks require certain income standards to be met, and can refuse client, if he/she is deemed not to have sufficient funds, as well as banks require extensive documentation on your modes of income. Meanwhile non-bank creditors are usually unable to provide funding for bigger projects (e.g. when investing in commercial or industrial property) and usually have higher interest rates due to the risks they take with each client.

Thus, choosing your type of mortgage is a delicate task of balancing pros and cons, which is why it is highly advised to hire a local real property guiding agency to handle the matters. Their extensive knowledge in local mortgage market will allow choosing a loan that perfectly suits your needs, and also to do so with maximum efficiency.