This type of financing has a greater demand when the financial sector decreases the granting of personal loans in the crisis that begins in 2008. The main reason is that a loan with the guarantee of a property gives the entity more security than money It will be returned.
Loans with the guarantee of a property are called home equity loans. It is when a bank or financial person gives credit to an individual with the condition that the applicant has a property as security and guarantee that the money will be returned.
That is, the conditions for requesting it are more flexible because entities are at a lower risk that the money will not be returned and, at the same time, is a viable option for people who do not have a solvent profile for some entities.
First of all, the applicant for a home equity loan must have a property free of economic charges, that does not support a mortgage charge, or that the economic burden is small.
There is no specific amount that can be requested, since each property has a different value. Normally, you can get up to 60% of the value of the property and some entities offer up to $ 300,000.
As we have mentioned, you can opt for this financing if your property has few economic charges. In that situation the outstanding amount will be subtracted from the appraised value of the home. And you can ask for up to 60% of the value of your home less the economic burden.
One of the easiest ways to apply for a loan with the endorsement of a house or property is through the Good Finance financial portal. They specialize in loans with a property guarantee and according to your profile they help you get the loan you need.
Their most notable advantage is that they offer a personalized service, so that, on the one hand, they analyze your situation and, on the other hand, they carry out a study of the products that offer loans with the endorsement of a property.
In this way they put you in touch with the entities that your profile meets their requirements. The steps to follow are the following:
Rate the home
Fill out the application
Compare and choose the best loan
It is a quick and easy way to compare the products on the market and choose the one that brings the most benefits.
It can be requested by any person who owns a property free of charges or with few economic charges, but in three different cases it is recommended and it is more convenient to request a loan with the endorsement of a property .
When you need high amounts of money.
You can get $ 300,000 , taking into account the value of the property, and the return terms, in general, are more flexible and extensive than in other products. It is a good option when you want to finance a project that involves a high outlay. For example: financing studies, renovating a house, buying a car, promoting a business project, etc.
When you find yourself in an irregular situation.
This type of financing is an option or alternative for those people who are on a list of delinquents such as ASNEF or RAI , do not have a personal guarantee, cannot justify their income or are in an unemployment employment situation. This is possible because the property is collateral and the security that the loan will be repaid.
To unify debts.
Having debts, in many cases, implies being on a list of delinquents with the consequence that entities do not accept that profile. So that a person can not obtain credit to settle their debts and keep a more flexible fee. Loans with the guarantee of a property do not take into account files such as ASNEF or RAI , therefore it is a good option for a reunification of debts with fees adapted to the situation of each person.
As we have commented, the main requirement of home equity loans is to have a property as collateral , that is, to be the owner. This property has to be a property such as: a house (house or flat), a land, a shop, an industrial building. The higher the value of the appraisal of the property, the more financing you can receive.
In general, the following requirements must also be met:
To be over 18 years old
Have a property free of economic charges or with few economic charges
Be financially solvent
Be able to meet the monthly fees
Provide the documentation that the entity requires
The main difference with the mortgage loans is that in the loans with the guarantee of a property you do not have to justify the reason for your application and when you ask for a mortgage the purpose is always to buy a house.
Another difference is that with mortgages you do not get the money directly and do not accept applications with ASNEF or another list of delinquents, however, loans with a home guarantee do provide you with the money directly without taking into account the delinquent lists .
As for the difference with personal loans, the loans with a property guarantee accept applications with ASNEF and the others generally do not accept profiles on delinquent lists.
Finally, another difference to take into account is that the interest rate of loans with the guarantee of a property is usually higher than the interest of other products because entities accept profiles with debts or other loans and are at greater risk of not being returned.