A huge plus is a loan secured by real estate , the fact is that financial institutions such as banks do not at all control the borrower’s use of the received loan funds. That is, in his right to funds acquired from a bank, to build a house in the suburbs, buy an apartment, open his own emergency, put money into business.
The money received from the bank can be used for any personal needs, for example, to pay for large purchases, repair an apartment and a house, training, courses, for various events, vacation abroad, travel, to maintain and develop a business, and others.
Most banks (but not all) have an interest rate on a loan secured by real estate slightly higher than the rate on a classic mortgage loan (the difference is about 05-1.5 percent). On average, for a loan secured by real estate, the payment will be from 13.5 to 14.5% in foreign currency and from 15 to 18% if you take a loan in UAH.
Loans secured by real estate are given for a fairly decent period of up to 10-20 years, no more, while a loan without collateral is issued for a maximum of 1-6 years, while only in national currency (in hryvnias) and its rates are 29 -36% per annum.
In most cases, banks are ready to issue a loan amount on the security of real estate, which can reach 70-80% of its estimated value. That is, with the estimated cost of housing at 100 thousand dollars on credit, you can get 70-80 thousand dollars. and use it for your purposes at your own discretion. True, in some banks there are restrictions on the maximum loan amount, therefore you will have to look for a bank that does not impose a loan limit if its amount is very significant.
Fee for a loan, for example, at 70 thousand dollars will be considerable. With an interest rate of 14% per annum for a period of 20 years, the payment will be more than 800 dollars / month. (according to the annuity scheme). When you purchase a new home on bail already existing will not require any down payments. At the present time, it is almost impossible to find a loan for the purchase of housing with a zero contribution.
Under the prevailing conditions of high inflation and due to the constant lack of financial resources, banks regularly tighten the requirements for mortgage borrowers, increasing the size of the down payment for their customers, and in the near future it will amount to an average of 25% for most banks. Due to the increase in lending rates, a loan for the purchase of real estate will be possible only for solvent customers.
Similar problems await those who wish to start a business and start it from scratch. For all entrepreneurs, the issuance of targeted loans is subject to their employment in the market for more than 3-6 months, and only on the security of property (cars, real estate, equipment, etc.) In the case of unsecured loans to small businesses, the amount will be quite modest, and to give out it can only after they learn the business reputation of the borrower.
Even in the current situation, obtaining a loan on bail will not be difficult. It is much more difficult to make the right choice regarding the investment object for the money received in the loan, and in this way to revive and increase the money frozen in real estate.