Real estate may be the collateral and thus the repayment guarantee for the financing institution. The most popular real estate is of course a house, an apartment or a plot.
Real estate loans are offered not only by banks, but also non-banking companies, thanks to which the loan offer can be higher and more attractive to the client.
Secured loans – what they consist of
There are many products to choose from on the financial market: non-bank loans, business loans, cash and mortgage loans. The latter are divided into mortgage loans and real estate loans. If you are a real estate owner, you can use this fact. The property can be your credit collateral.
With the launch of the real estate loan, an entry is made to the lender’s land and mortgage register. In exchange for establishing the land and mortgage register, you can obtain financing in the amount of up to 80% of the property value. If you do not own a property, you can find a person who will agree that your property will be your collateral for the secured loan.
What’s important: SETTING UP THE MORTGAGE DOES NOT CHANGE YOUR RIGHTS TO IT. YOU ARE STILL OWNER AND YOU CAN USE IT.
How to get it
The easiest way is to visit your credit advisor. Analyze your financial situation with him. A good adviser will adjust the loan to your needs. Make a comparison of offers. Pay attention to the costs and provisions in the loan agreement.
Apply for a loan against real estate only if you really own the property or someone is able to give you permission to rent your own property. Both banks and non-banking companies will always ask for a document confirming its ownership. In this way, they check the reliability of the security.
Real estate loan – what effects does it have?
Recall. The collateral for the real estate loan is the plot, apartment or house. If the debtor pays the debt on time, the lender will not claim the property. And after the full repayment of the loan will be removed from the land and mortgage register. That is why a loan against real estate pays off and is very secure. However, if the borrower fails to repay the obligation, a negative scenario is possible.
As in any other case of a cash loan, other than a bank loan or mortgage loan, in this case standard debt collection or enforcement procedures are initiated. If the loan is not repaid, the debtor is called on to pay. If this does not work, the contract is terminated with a notice period.
The next step, after not settling the arrears, is to take legal action, which may result in the enforcement of the property. In extreme cases, not repaying the loan against the property may result in its sale, and the proceeds from the sale will be transferred to the lender for the debt.