What is commonly called the grace period of a mortgage loan occurs when it is established as one of the conditions that there is a time interval where it is not necessary to pay the loan installments.
At first glance it seems that this of not paying fees for a certain time is the best thing there can be when it comes to getting a mortgage. However, this grace period has its disadvantages.
What are the disadvantages of the grace period of a mortgage loan?
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The main disadvantages that having an exempt payment time can mean are the following:
- There is an increase in fees: The fees to be paid increase because the interest of the unpaid months is added.
- The time to pay the loan is extended: In addition to the time that corresponds to the number of installments, the time that will be free of payment is added.
Is it convenient or not to receive a grace period?
The function of this grace period is in many cases to give the creditor time so that he can use the money received without pressure (for example, if it is working capital); However, the following points must be taken into account:
- As the interest corresponding to that period will be shifted to the installments, this relief will have to be rewarded in the future.
- In the case of the grace period of a mortgage loan, this would be convenient when it is assumed that there will be no liquidity during the first months.
- The convenience or not of the grace periods of mortgage loans will depend on the immediate or future needs that are had.
- That time without collection is not a gift precisely because there will be an increase in the cost of debt. Here you have a tip to avoid it.
For example, without a grace period, it may be established that a loan is paid in 12 installments of $ 1,500,000 Colombian Pesos beginning to be paid in January, while the same grace period may begin to be paid in April with the same 12 installments but greater than $ 1,600,000 Colombian pesos.