1. What are home equity loans?
Sometimes it is necessary to resort to a source of financing to deal with a debt, an unforeseen event or to develop a business or personal project. The traditional way of resorting to this financing is to go to the bank but, sometimes, they do not provide financing because they consider that they do not meet the parameters desired by the entity or, also, accessing this financing can be a very long process and liquidity is needed very urgently.
However, the fact that banks deny financing requests, or that financing is needed sooner, does not mean that it cannot be accessed; There are home equity loans . These loans are a financing alternative and can be requested by anyone and for any purpose. The only requirement is to be of legal age and provide a property as collateral and guarantee.
For this reason, loans with a mortgage guarantee have the peculiarity that a property (houses, buildings, warehouses, premises, land ...) is used as collateral and the borrower responds with this property in case of loan default. Unlike conventional personal loans that takes into account the economic capacity of the applicant (such as income, debts ...) to determine the feasibility of the operation, in home equity loans is taken into account, among other factors, property appraisal to analyze what is the amount to be lent. Therefore, the amount of the mortgage loan depends mainly on the value of the property (or properties) that is provided as collateral. Depending on the appraisal of the property, and subtracting if you have any other mortgage still linked, you can access a more or less high amount.
These loans can be used for any purpose, they do not necessarily have to be exclusively for a home, as is the case with a mortgage loan. Generally, companies or people who need a large amount of money resort to this financing resource and, for risk reasons, have less than optimal profiles for banks . Therefore, due to the risk associated with this financing, a property is requested as collateral.
Like any loan, the client who requests it must pay the amount offered plus interest in the agreed installments and terms. In our case, these terms are made to measure , so that it is much easier to repay the loan.
In order to qualify for a home equity loan , you need these requirements :
- Have a property , either your own, a relative or acquaintance, that is free of charges or that there is very little left to pay the mortgage.
- That the amount of financing requested does not exceed 45% of the value of the appraisal.
- Maximum repayment period of 5 years.
The types of properties that are accepted for a home equity loan are the following:
- Homes, both first or second residence as houses, flats, chalets ...
- Residential buildings (with or without tenants), hotels, apartments, offices ...
- Industrial ships.
- Commercial premises such as bars, restaurants, offices, pharmacies, laundries, offices ...
- Land or plots.
These loans can offer large amounts of money. With Dark Keep you can request the amount you need, regardless of the maximum.
Before applying for a home equity loan it is very important to know exactly all the advantages and disadvantages :
A home equity loan can be very useful because large sums of money can be obtained even if the economic situation is complicated. But keep in mind that this financing carries a great risk and it must be used with caution and responsibly.
To make a loan with a home equity guarantee, it is very important to know the advantages and disadvantages mentioned above, in addition to opting for a trustworthy financier that acts with transparency and honesty and knows all its conditions. You have to be very sure of with whom to make a loan with a mortgage guarantee and, the chosen entity, has to be registered in the state registry of intermediation and credit granting companies. Dark Keep is registered under number 346/2012 and all of our agents have the qualifications required by the Bank of Spain.
Therefore, it is important to be able to hold a joint meeting to be able to help and advise and find the appropriate financial solution.
3. What maximum amount can be requested?
Generally, companies that offer home equity loans have financial limits. The particularity of Dark Keep is that we have no limit , you can request the amount you need; the only condition is that said amount does not exceed 45% of the total value of the guarantee.
3.1. How to value the property?
To make a home equity loan, it is essential to appraise the property that will act as collateral and take into account that this property must be free of charges or with a not too high debt.
If an updated appraisal value is not available, Dark Keep will arrange an appraisal.
3.2. How to calculate the amount that can be requested?
Keep in mind that you have to subtract the outstanding amount that remains to be paid from the guarantee provided, for example :
- The appraisal values the property used as mortgage guarantee at € 500,000 (there is the possibility of including a second or third property).
- If you meet all the conditions, the maximum funding is 45% . So, the available financing is 500,000 * 0.45 = € 225,000.
- € 100,000 mortgage remains to be paid.
- The amount that can be requested is 225,000 (maximum financing amount) - 100,000 € (pending mortgage) = 125,000 € the amount that can be requested.
4. When to apply for a home equity loan?
You can request a loan with a home equity guarantee whenever necessary , but it is always used when banks do not offer financing and the liquidity situation is urgent. There are many reasons to apply for a home equity loan, but the most common are :
- Cancel liens.
- Stop auctions.
- Solve tax incidents.
- Investments and real estate promotions.
- Finance the acceptance of an inheritance.
- Rehabilitation and reforms.
To apply for a home equity loan, it does not matter that you are registered on a delinquency list, you only have to meet two requirements :
- Be of age.
- Have a home as a guarantee and, generally, that it is free of charges.
4.1. Conditions for applying for a home equity loan
There are different options on the market, Dark Keep offers the conditions that best suit the client's needs :
- From € 20,000 to where it is needed, without limit .
- Repayment period of up to 5 years.
- Financing percentage (LTV) of up to 45%.
- ASNEF, RAI, embargoes are accepted ...
- Free feasibility study.
4.2. What if the amount is not refunded?
In all the operations that are carried out, every effort is made to guarantee the viability and successful completion of the operation . That the execution of guarantees is the last resort and an unwanted situation for all parties can be avoided.
If a situation of non-payment is reached, we will look for all possible ways to find a solution , for this it is very important to have the collaboration and predisposition of the client, and if finally there is no possible solution, the corresponding judicial process would begin to proceed to the Seizure of the property used as collateral and guarantee.