The decision to buy a house is one of the most important in life; however, choosing the home that best fits our needs largely depends on the budget allocated for this purpose. Once the amount to invest is determined, a list of variables comes into play that could substantially change the course of this decision.
One of these is the legal figure that will be used in case of applying for a bank loan. Which is the best option? A housing loan under the legal framework of a mortgage or trust?
Just like the choice of the loan currency, the selection of the legal form of credit will depend on the preferences of the interested party. The mortgage loan and the trust are very similar in terms of term, interest rates, and installments, but there are specific differences that can mean a significant change.
Trusts
“The trust, for example, provides asset protection as it is unseizable.” It is a private contract which allows for information privacy, offers a discount on the banking commission, reduces initial legal expenses since the transfer is carried out later, and provides the possibility of including a testamentary clause to designate beneficiaries,” explained Leonardo Soto, Credit Products Manager at Scotiabank.
Data from Scotiabank indicates that in 2024, the request for housing loans under the trust figure showed a growth of 26.5% compared to 2023, reflecting a growing interest in this legal figure.
Mortgage
In the case of a mortgage loan, the legal fees and expenses related to the transfer must be covered upfront. This modality does not include a testamentary clause and the information, being public, can be found in the Public Registry.
The scenarios
When acquiring a financing product, it is recommended that the person conduct a prior analysis of their personal or family economic situation, so that they can determine their ability to assume the loan payment during the term agreed upon with the bank.
Those interested in a mortgage for purchasing a home can consult special conditions and clear up any doubts about the option that suits them best with financial experts.
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