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A mortgage credit is a loan you take out to buy, build, or renovate your own home. You obtain this credit from a lender such as a bank. There are various options or types of home loans that you can take out.
In practice, it comes down to this: a bank lends you money for the realization of your project, whether you are buying, building, or renovating. You repay this at agreed-upon times and at a fixed or variable interest rate.
A mortgage credit can be obtained in two ways: through a credit or a line of credit.
A credit is focused on a single action: after the bank lended you a sum of money, you must repay it within a certain period and at agreed-upon times. To ensure the repayment, the bank will take a mortgage on the property you purchase.
This is a revolving credit. In this way, you can, for example, first buy a piece of land, then build, and possibly carry out renovation works later. You can reborrow the agreed amount or part of it at each phase with a new credit within the framework of that line of credit, provided that you have already repaid sufficient capital and do not exceed the total amount of the line of credit.
Many mortgage loans are now granted in the form of a line of credit. This is certainly a good solution for those who want to build or renovate in phases.
You can spread your projects and work in phases. There is no need for a notary to be involved with each new withdrawal.
The reference index is a benchmark used to determine the interest rate on variable mortgage credits. In other words, it affects how much interest you pay and thus your monthly repayments. This index is calculated and published monthly by the Federal Debt Agency.