Homeowners can borrow money against the home equity, so it is home equity loans. Usually, people need to own a home for investment purposes, and businesses need capital for business expansion and startup. In such matters, you should consider a home equity loan so that it will be part of your paid mortgage. Lenders will help you in line with credit that relies on your home equity, or you will have an option of lump-sum loan payment.
If you want to pay all your debts and keep only one, you have a good option: offer your house as a mortgage guarantee to obtain a free loan. We tell you next what are the loans with a mortgage guarantee.
When can we benefit from a home equity loan?
Sure, you know someone who has many debts. I do not know if there are as many as María Helena. She had purchased many products and services and paid them in installments or with credit cards. He owed the car, the giant TV, the dental treatment, a trip he will make at the end of the year, his little son’s party, the license plates, and many cravings for clothes and accessories. I knew that was the way to get things: getting into debt. Each time she received her salary, María Helena distributed the money in envelopes marked with each debt. It is not always enough to cover all commitments.
María Helena sent me the extracts of the cards, the chronograms of the debts of the car and the dentist, and the relation of the other debts with the detail of the financing. Indeed. She was paying high interest. The television, for example, bought it in a promotion. Since he did not have cash at that time, he authorized deferring the purchase to 24 months. With the interest of that purchase would have bought another television, larger. I counted the money I was paying in interest and called her.
On loans with mortgage guarantee
I explained that some banks handle a loan called a “home equity loan.” The money can be used in whatever you want: travel, studies, investments, cars, or payment of debts. The important thing is that, by offering real estate as collateral, the rate is very interesting. For that reason, for Maria Helena, it was a better business to acquire a loan to pay all the debts, mortgaging her house.
This product has many names in the market: a personal loan with mortgage guarantee, credit of free availability with mortgage guarantee, credit with mortgage guarantee. As you can see, it is different from the credit we know to buy a property (in this case, the money is requested for the purchase of the house). Likewise, in each entity, you will find differences in the design of the products: some offer terms of up to five years, others for up to 15 years. Some lend up to the US $100,000, others up to the US $600,000.
There is a perfect plan for your customer profile
The important thing in this business is that the property’s value does support the value of the credit. And, very importantly, the house is in your name; that is, the debtor and owner must be the same person. The property must have a factory declaration, be independent, and be notarized before the Public Registry. This requirement is very similar to when a transfer of mortgage credit is requested. The bank will demand a mortgage in the first degree in its favor.
The application is accompanied by information about the income and the documents of the house, among others. The bank will make these evaluations:
- Study of the viability of the credit: your ability to pay according to income.
- Study of titles: It will check that the good can be mortgaged (it does not have other mortgages or demands or other restrictions and taxes are up to date);
- Appraisal: You will hire the services of a specialist to determine the commercial value of the property.
- When they approve the loan, they will ask for the insurance:
- Sure, all risk: if something happens to the house, the insurance responds.
- Relief insurance: it is equivalent to life insurance. The insurer will cancel the debt to the bank.
Now the need is to advise coworkers about handling purchases on credit as it is certain that several individuals can benefit from a home equity loan.
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