Below we explain what mortgage loans are , what they consist of, what benefits they have and how to apply for one.
What are home loans?
Mortgage loans are financial products for which the company or person receives an economic amount with the condition of repaying it in periodic installments along with their interests, just like a normal loan. If the loan is obtained with private financing , these installments may have total or partial deficiencies until a specific date or objective.
These types of loans are named mortgages because they have a specific guarantee: a property . This is the main difference, that with this loan a property supports the operation in case of default.
Generally, the financial product of the mortgage loan is used to have financing to buy or rehabilitate a property. As we have said previously, it is essential to provide a guarantee before granting this loan. In the case of mortgage loans, the company or person requesting the loan puts a property as collateral that, in the event of non-payment, this property will become part of the financial institution.
This type of financing is a type of financial operation currently widely used by companies and individuals because it is a way to reduce the risk of repaying the loan. In addition, with private financing, financing is also obtained faster and with a personalized and more flexible return.
There are different types of home loans, usually determined by the type of installments. Depending on the type of operation and the guarantee provided, there may be more or less deficiencies, reductions of fees, increasing or decreasing.
Mortgage loans in private financing
On many occasions, companies and individuals turn to private credit or bank financing when the bank denies them financing for reasons of default risk.
With this scenario, to obtain private financing , a mortgage or mortgage loan will always be made and a real estate guarantee will always be required to provide greater security to the operation. This is done in this way to reduce the risk for the financial institution with which, in itself, it is usually an operation with a high risk, more than usual.
For this reason, having a mortgage guarantee involved , one of the great advantages of the mortgage loan is that no matter the amount requested, you can access a very high amount of financing , because everything will depend on the value of the property contributed and the charges that are with it.
With private loans, mortgage loans are usually granted for a maximum amount of 45% of the value of the home appraisal . In addition, to determine the repayment capacity of the mortgage loan, there are other important factors such as the turnover of the company or the income of the family unit but, in the end, the viability of the operation will fall on the property and the charges that are attached to these.
Difference between home loan and home loan
A home loan and a home loan share many similarities. Although the purpose is the same, they work differently.
The mortgage loan is closed , it has certain conditions in a contract that, in the event that the client wants to modify them once formalized, a novation must be made . Some cases are, for example, to extend the term, the amount to be financed, etc.
For the mortgage credit , financing is granted and the owner can have all the capital or only a part . Each time you need more money, you can have the remaining amount, as long as the total amount does not exceed the credit limit agreed at the beginning. Mortgage credit is widely used for developers who want to start or finish a work, and this entire process can also be called "by certifications".
Difference of Home Loan vs. Home Equity Loan
Although they have many similarities and characteristics in common, it is not the same type of product. Loans or mortgages are used to acquire a property and loans with home equity are used for other purposes, such as to reunify debts, pay inheritances, etc ... And their interest is usually higher.
Home loans They can be obtained in traditional banks but loans with a home equity guarantee are normally contracted through financial intermediaries or private lenders.
If you want to know more about loans with home equity, you can read our section on home equity loans .
Procedure to get it
If you want to get a mortgage loan , this is usually the most common procedure:
- To plan the real needs and conditions to be achieved.
- Carry out a feasibility study of the operation, for which a series of documentation will be requested .
- Appraisal of the real estate that will be used as collateral. From this value, the maximum amount that the financial institution is willing to offer can be determined . Normally, appraisers analyze the age, location, characteristics ...
- Negotiate the repayment term, interest rate, commissions, if any, and expenses associated with the operation.
- Make a binding offer with all the details that have been negotiated between both parties.
Private financing in the best hands
It is very important to highlight that mortgage loans are a type of complex financial operations at a technical level because it combines certain legal and financial aspects that not all companies have the knowledge or experience to understand and manage in the most professional way.
The most important thing is to have a team of financial experts and lawyers who are experts on the subject, who generate trust, security and, above all, transparency. At Dark Keep we are leaders in the mortgage lending and private equity sector .
At Dark Keep get these benefits:
- No limit . No matter the economic amount that is needed, we can deal with any operation.
- We get the financing that others cannot.
- Customize the return according to your needs, even with grace periods if necessary.
- Absolute transparency , we will constantly accompany you and advise you throughout the process.
- We are leaders in the sector and we have a lot of experience, we have been obtaining financing for our clients for 15 years.