There are many types of loans and credits marketed by banks, but one of the most specific for its special characteristics is the equity loans. Its popularity in recent years has been due to the lack of financing to individuals as a result of the economic crisis generated since 2008. This type of loan is based on a property free of charge or with reduced debt is provided as collateral to the operation in order to access the line of credit that, otherwise, you could not get.
The loans with mortgage guarantee is a type of loan in which a property is contributed like guarantee of the operation. Additionally, the financial institution will analyze your economic situation to assess if they grant you the loan. So it will be essential to show income, official or not, with which to face the monthly installments
Loans with mortgage guarantee: interest rate, term and financing
- Financing time: The loans with mortgage guarantee grant a maximum amount of 30-40% of the real value of the property
- Repayment period:In a term loan with mortgage guarantee you will usually have between 12 and 180 months to repay the loan depending on the amount required. However, in these credits the negotiation with the lender is very frequent and in this way you can extend the deadlines to adjust to your personal needs.
- Interest rates: In terms of Interest rates you can be more demanding than a personal loan. Due to the lower requirements that your concession requires, the cost of these products is somewhat higher than in traditional credits.
Bonding loans with mortgage collateral
The loans with mortgage guarantee do not have any type of connections. You will not have to contract other products with your financial institution such as payroll, insurance or bank accounts.
Mortgage loans for various purposes
The mortgage loan can be used to finance a new business, cancel an outstanding debt, and make reforms in your home or premises or simply to obtain liquidity. All you have to do is indicate in the loan contract what you want to use it for.However, home equity loans cannot be used to purchase a home.
More flexible requirements in your concession
Regardless of the guarantee of your apartment or apartment, the conditions for accessing mortgage-backed loans are softer than in the other financing models. Of course, you must show some income, official or not, with which to pay the loan installments.
But what most characterizes the loans with mortgage guarantee, is that they are open to all user profiles: self-employed, pensioners, employees, temporary workers and others
Your concession will be faster because you will have to go through fewer administrative procedures than in other financing models. Without being included in the category of quick credits, you will be sure that in a few days you will have the amount requested in your checking account. The crediting companies often carry out a free study without compromise of your situation and they will give you an answer to your request in a maximum of 24 hours.
Why to apply for a mortgage loan?
The key to home equity loans or mortgage loan is that the requirements for their concession are more flexible than in the case of traditional personal loans. For example, it does not matter if the applicant is included in an ASNEF or RAI file, or that you have other loans contracted. In return, you will have to endorse the operation with a real estate property that would be put at risk if it were not possible to face the payments. It is a risk that you have to run to enter the financing market if you do not meet the requirements that banks impose for a personal loan. In short, your access is more open to your customer profile, but with greater risk in the operation for your assets.
In many cases it is the last resort you have when financial institutions deny you other types of loans. The profiles that usually request these types of loans are self-employed, pensioners, workers with non-regular income or who are or have been in the past.
Conclusion: Be careful when borrowing money against your home as part of an investment strategy. There is no such thing as a “guaranteed” or “risk free” investment. Avoid companies that ask for large commissions in advance, or make unrealistic promises, such as restoring your credit or canceling your debts, paying just a few cents for every dollar.You should carefully consider all your options before making a loan against your home, in order to make an investment. All investments can lose value and that could put your home at risk, if later you cannot pay the loan.