According to recent surveys, the number of indebted people has broken records. According to latest survey, there are 61.8 million delinquent people in the country, reaching 40.3% of the adult population.
Are you interested in the collateral loan but don’t think you understand it right? Have many questions? It’s normal. Doubts are part of the process. Secured property is simpler than it sounds. And really advantageous. It is worth understanding the service, as it may be the most suitable for your profile. Not sure how Home Secured Loan works? Read:
What is Home Secured Loan? What advantages, risks, recommendations ..
A great alternative to borrowers is the secured home loan as a way to repay the debt. Although little known in the country, this credit alternative allows the client to apply for loans of very high value, relatively low interest, and can use this money to charge other debts that have accumulated.
How Home Secured Credit Works
Mortgage, as this type of loan is also known, is more popular in the United States, and is falling in the taste of indebtedness today. By refinancing property it is possible for a property owner to be able to use his residence or other property on his behalf as collateral.
The most advantageous of this type of credit is that the homeowner does not have to sell the property to use it as collateral, ie the loan seeker can continue living in the residence until the full payment of the debt.
The only restriction for this type of loan is that the property must be in the name of the applicant, paid, without charge, be valued between $ 200,000 and $ 5 million, and with the documents on time. Like the definitive deed in hand, residence registration, for example.
In the secured loan, the contractor may use a residence or office as collateral. In most contracts, the loan has a minimum time of 12 months for repayment, and in some cases, the installments may last for years (maximum 20 years).
This is a great solution for defaulters to be able to pay off their debts, and it also serves as an option for entrepreneurs who need an amount to start their own business. However, it should be used consciously to avoid future inconvenience.
Conscientious Ways To Use Mortgage
As mentioned earlier, this type of credit is ideal for people who can use a property that meets the requirements imposed as collateral. In addition, the applicant must have income compatible with the amounts of the installments to be paid and have financial stability.
As explained at the beginning of the text, this type of loan uses a property as a guarantee of payment, ie, if the contractor uses your residence as a guarantee of payment he may end up losing the residence for not being able to pay the installment credit with Property guarantee.
Secured loan is very dangerous because if the contractor cannot repay the debt, he loses the house
Therefore, before applying for this loan option, it is necessary that the applicant knows to be realistic and to see that this form of credit needs commitment. Because of this, it is ideal to be used to pay off other debts or start a business of your own.
It is very important that the loan seeker does not have any other debt when mortgaging the house, as this way it can focus only on one debt. In addition, an assessment of the Total Effective Cost (CET) of the operation is required.
This is a measurement that will be responsible for establishing the total costs of the loan, ie the CET takes into account all the values that are related in the transaction, from the collection of fees and fees, interest, taxes, among others.
Finally, before applying for the secured home loan, the applicant should use all the tools to make a credit options assessment and compare all types of mortgages that are offered by the most conventional financial institutions, always distrusting them. conditions that appear to be very easy.