Financing Amortization: What is it? – Streamlines Real Estate Credit

Currently, financing is the main type of acquisition of goods accessible to the market. If you want, today, to acquire a home of your own, there are some typical lines of credit to simplify the realization of your dream, significantly reducing the time for your success.

Regardless of the popularity of real estate financing, doubts on this topic still arise quite frequently.

A very clear example is about the repayment of loans!

It is seen as a super simple practice, but it generates countless questions for people, especially for those who have open contracts or are thinking about financing some good in the future.

Therefore, we have prepared a content full of information about what financing amortization really is and what the advantages of this process are. Ready to solve all your doubts? So, come with us and have a good read!

What is loan repayment?

The expression “amortization” means to gradually reduce a debt; reduce much of it to smaller portions over time.

Thus, the amortization of real estate financing is nothing more than the periodic payment, according to an agreed term, with the purpose of minimizing the final amount of the debt.

To better illustrate this situation, let’s imagine that you have a loan that must be paid in 24 installments of the same amount. Over the months, with the correct payment for each part, you are amortizing your account, that is, reducing it.

And how it works?

With the above conceptualization, it can be seen that there are truly no secrets for the operation of loan repayment, right?

In fact, this process happens in a completely natural way. Thus, just as you can choose the type of credit you want to acquire, the financial institution also decides on the form of debt repayment.

Although quite technical, it is super important for you to know that there are, today, two popular amortization systems on the market. Are they:

  1. SAC Table: in this way, the installments can be readjusted, reducing as the financing is paid by you. That is, the first installment is of greater value, while the last is the cheapest;
  2. Tabela Price: in this model, all installments have the same financial value during the entire duration of the financing.

What are the advantages of loan repayment?

Now that you know exactly what mortgage repayment is, we can point out the incredible benefits of this process for your budgeting and financial planning!

Decrease in your outstanding balance

The strongest benefit of loan repayment is, without doubt, the significant reduction in the total balance of your debt. All paid installments bring you closer to the happy settlement of your mortgage loan agreement.

The best part is that, with amortization, this reduction happens much more quickly, thus bringing you closer to the success of finally having your own good.

Deduction of interest rates and charges

It is essential that you have a great financial organization to handle the correct payment of installments of your chosen financing.

With this practice, not only do you reduce your installments and get closer to your dreamed of own property, but also eliminate all opportunities for accumulating debt. Thus, you will be entitled to a reduction of your interest and economic charges.

If you are interested in knowing more about the subject, please contact us.

Everyone at Agiliza is ready to present you the best mortgage loan solutions on the market!

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