Right now, many people are in need of borrowed money. The problem is that not all loan modalities offer affordable interest rates or terms. That is why we decided to talk about the advantages of secured home loans. Have you heard of this modality?
In it, the customer offers his property as collateral. At first glance, many people find it risky, due to the condition of placing the property in the transaction. However, lending capital through home equity – the name given to this type of loan – may, however, be a good idea. Shall we understand more about this? Check out the advantages of this type of business!
1. Up to half the value of the property available as credit
The limits on personal loans may not meet your needs. This would force him to resort to more than one loan, which would make it difficult to repay them, for example.
One of the advantages of a secured home loan is that you can borrow up to half the value of the property. This guarantees the client, in most cases, a few hundred thousand reais – an amount that helps him to achieve his financial goals.
2. Property is the guarantee
In this case, the client does not have to worry about proving income or other ways of demonstrating to the bank that he will be able to afford the loan installments, for fear of not being approved.
As the guarantee is the property, access to this money is much easier and less bureaucratic, depending, mainly, on the property with the documentation in order.
3. It is not necessary to vacate the property
The good news is that you will not need to leave the house in order to qualify for the loan. You will be able to continue living on-site without any problems, paying an amount for the loan that can be much less than that of rent.
4. No need to justify the destination of the money
There is no need for you to explain what you will do with the borrowed capital. You can use it to invest in your small business, pay off other loans, use it to renovate the property, etc.
This gives the customer more privacy and freedom to deal with their own financial life – which is another advantage of a secured home loan.
5. Fees are cheaper
The amount of interest charged on home equity is much lower than that of other types of loans, such as personal credit, overdraft and credit card. Compared to overdraft, for example, the amounts can be more than 90% lower.
6. Longer payment term
The payment term is also longer than that of other loans. This brings tranquility to the individual, as he gains more time to plan his financial life.
Because it is a credit with a more solid guarantee, banks offer much more friendly conditions to customers, making the process more comfortable for those who need money and do not want to get lost with short terms.
As we have seen, there are many advantages of secured home loans, is there not? Compared to other forms of access to credit, this is much more viable for consumers.
Having a consulting firm focused on real estate financing is the best way to help you analyze which is the best option. Are you in need of borrowed money and want to simulate the value of your home equity monthly installments? Get in touch with our team!