The need makes home equity loans an option that is often faster to obtain. For this, the banking institutions analyze the client that through a mortgage guarantee supports the debt. It is safer for banks to have a real estate on which to claim.
In Colombia, today it is so easy to apply for a mortgage loan that countless entities have been created. The majority because they are of illegal origin are intervened and for this, several state entities are supported. The Attorney General’s Office, together with the Superintendencies: Finance, Industry and Commerce, and the Solidarity are at the forefront.
As a recommendation, it is to go to financial institutions (banks), for these requests. Until the state does not organize the policies of the other entities and decree it by legal means.
How does home equity loans work?
Many people in the eagerness to carry out a project, or because they have a need, go without thinking about mortgage loans. The first thing the bank analyzes is the financial solvency of the client. Usually such loans are given to those who are variable in their income. Therefore, the most beneficial and safe is to have the home as guarantee or guarantee. Although this, it must be owned by the customer and be debt free.
This is due to the fact that home equity loans are delivered for activities other than a home purchase. Where the mortgage loan is linked to the real estate.
In the mortgage loan, the amount of money they can lend to the client is related to the commercial value of the home. In this way, it may be higher than a personal loan and the term can be between 10 and 20 years.
Risks with the home equity loan
Although it is very striking to obtain a mortgage loan, for the amounts used, at the same time it is very risky. If the payments are not fulfilled in the agreed times the house can be lost.
The interest that can be paid is higher, especially when you enter into delinquent debt.
Because of debt-free housing at the initiation of the agreement , it is more prone to the rapid management of property dispossession.
The procedures and expenses for approval of the mortgage loan are high, since it requires additional documentation.