Loans secured by property are a pretty serious thing. To prevent the emergence of a conflict situation, we need a strong confidence in our own solvency.
Often a similar situation arises when you need to get a significant amount of cash on credit, but the borrower has no chance to attract guarantors or the salary level is low. In this case, it is possible to try to get a loan secured by real estate.
Not so long ago, a mortgage loan was not as famous as it is today. But now this is a fairly popular form of lending, which makes it possible to take funds for training, increasing housing, acquiring new housing, or for other purposes.
A loan secured by property has several aspects. As collateral, absolutely any real estate can be presented, from a country house or a garage right up to a piece of land.
A mortgage loan is a great option compared to a consumer bank loan, in order to get a borrower that does not have enough salaries, a clean credit history, or perhaps he has other circumstances, according to which to take a property loan is the best option.
Lending secured by property . The main characteristic features.
The main characteristics of a loan secured by property include the following:
- In the form of a pledge, it is possible to attract various property, for example, your apartment, house, any land plot, etc.
- Moreover, the amount of the loan is not required to be higher than 70% of the assessed value of the collateral.
- There is a great chance to use the money for absolutely any purpose.
- Interest rates according to this type of lending are set at 15%.
- The loan period is from a couple of months to 5-7 years. Moreover, in the case of temporary registration, it must be understood that the lending period is in no way able to be longer than the registration time.
Property loan. What are the requirements for the borrower?
The requirements for borrowers wishing to take out a loan secured by property almost do not differ from the conditions for obtaining any other loan. We list them:
The age of the borrower at the time of signing the contract must be no less than 18 years, and during the period of the last payment on it – no more than 75 years.
The specific conditions for the length of service are presented. As a rule, he is obliged to be at least 6 months in the final place of activity and, in general, at least one year of experience over the past 5 years.
In order to obtain a cash loan secured by property, the borrower must provide an identity document with a note on the availability of registration, papers that prove the borrower’s viability and documents for the property provided to secure the loan.
In the case of common ownership of property, the notarized consent of the second owner to pledge real estate follows.
Often, real estate is used as collateral, such as, for example, apartments, houses, garages. At the same time, a property loan with a pledge in the form of cars, expensive papers and valuable metals is pretty well known.
Regardless of which property you are mortgaging, failure to pay the amount of the debt does not mean that the property is being transferred to the creditor. First of all, the creditor must go to court, try to resolve the problem. In the event that this does not seem permissible, the subject of the pledge is sold at auction. From the proceeds, the debt to the creditor is first returned , and the remaining share goes to the borrower.
Over time, until you completely pay off the loan secured by the home, you will not be able to carry out various types of actions with it. In addition, banks will not take property that is your only home as collateral, especially if children under the age of majority live on it.
In case banks refused you, there is an additional opportunity to purchase a loan secured by real estate using the services of credit unions . The essence of the activities of such institutions is the issue of cash on the security of real estate. At the same time, acquiring funds in a credit union is slightly easier than in a bank, however, the amount payable, on the contrary, can be significantly larger.
It should be borne in mind that real estate is an appetizing piece for all sorts of crooks. For this reason, before applying for a loan secured by property, it is most advisable to consult a qualified lawyer who can help you navigate all the tricks of the loan agreement and tell you if there are any clauses imposing an additional liability on the borrower in the form of large fines and penalties.