Currently, there are different types of credit that offer the possibility of acquiring properties. This financial instrument is increasingly used, due to the increase in demand for real estate.

Indeed, the real estate market has experienced great growth in recent years. With the passage of time, it has become a new source of investment and income for many people.

Types of credit suitable for buying properties

When investing, it is essential to create a diversified portfolio that includes different financial assets such as stocks and bonds, but also properties to rent or resell.

Thanks to the different types of credit, you can finance all or part of a property and thus obtain future profits. These are the main alternatives offered by the current financial system:

Mortgages, the traditional types of credit

They represent the most common option for acquiring real estate. They can be classified into two categories:

  • With fixed rate: during the term of the credit the same interest is always paid. Its advantage is that, being fixed payments, they allow you to make a realistic budget and know exactly how much money you should allocate monthly to the loan installments.
  • Variable rate: The interest rate can be adjusted over time. The main attraction is that the initial payments are usually lower and, at the beginning of the credit, the rate is fixed. However, this can increase significantly after a period of time.

In general, mortgage loans are intended for first homes. This means that, if you already own a property in your name, your bank will likely offer other lines of credit to finance the purchase of a new property.

Free investment credit

Its main characteristic is that it does not require reporting to the bank the use made of the money. This means that you can allocate your credit for whatever you want, without being accountable to a financial institution. Thus, for example, you can use it to partially finance the purchase of a property. Or, to acquire materials for improvements, extensions and remodeling that increase its value.

In general, it is possible to access the money immediately and in a single disbursement. The disadvantage of this type of credit is that it has a high interest rate due to the absence of collateral. However, if you use it for your investments, in the long run it can help you generate passive income.

Consumption, one of the most common types of credit

They are credits intended for the consumption of goods and services. The amount of money you can access and the repayment term depend on your income and credit history.

Usually, the interest rate and fees are fixed, and are paid on a monthly basis. Although the duration of the credit varies according to the bank, the most common is that it is between 1 and 5 years. Depending on the bank, you can get different types of consumer credit. For example, libranza, with CDT guarantee or revolving quota (BBVA, 2022).

An important fact to keep in mind is that, in countries such as Colombia, certain financial operations include tax obligations. For example, the tax known as “4×1000” falls on some credit disbursements (Portafolio, 2021).


Home equity loans or second mortgage loans allow you to take on debt by placing your family home as collateral. That is, being the owner of a property, you receive an amount of money to return it in monthly installments. If you can’t keep paying the loan, the bank has the right to collect the debt on your home.

In addition, credit may be secured with other possessions such as a vehicle or savings account. However, the most common is to place a home as a guarantee. In general, these types of credit allow you to obtain an equivalent of up to 80% of the market value of your property.

However, the amount and interest rates also depend on your credit history and income level. Its main attraction is that it allows you to access a loan even if you have an unfavorable credit score .

Ultimately, the conditions of each credit may vary depending on the bank where you request it. That is why it is important that you analyze the available alternatives and consult with your trusted bank. Keep in mind the various types of credit and choose the one that best suits your needs. With the right option, you will get good leverage to buy real estate. Do not forget that acquiring real estate is an excellent strategy to diversify your investment portfolio and consolidate your assets.


BBVA Colombia. (2022). Consumer credits.

Federal Trade Commission. (2022). Home equity loans and lines of credit.

Portfolio. (2021). 4×1,000 tax: do you know when you have to pay it?

Wells Fargo. (2022). Types of mortgage loans.