When to make credit with property guarantee? Understand
As time goes by, new types of credit are emerging in Brazil, and credit with property guarantee is one of those options. This alternative stands out from the others because it is easily accessible and is intended for individuals and companies.
The value is granted through the fiduciary sale of immovable property that is pledged as collateral for the operation. The asset may be a property on which the applicant is living and there is no need to leave the property to close the transaction.
The most interesting of all is that the acquired resources can be used for any purpose since the company that offers the credit does not make any demands regarding the use of the values.
Do you want to know more about how to use credit with a property guarantee? Continue your reading and see everything on the subject!
How does a home equity loan work?
As the name suggests, the loan with property guarantee has as its main characteristic the sale of houses, apartments and other assets, which will be pledged as collateral to financial institutions. They lend the amounts at low interest, which must be returned within the stipulated deadlines.
Therefore, in this credit line, one of the prerequisites is that the applicant has registered real estate in his name. This property can be residential or commercial.
During the period that the person is paying the loan, they can continue to reside on-site or even keep it rented through a lease. The asset is sold until the end of the credit agreement when all installments are duly paid by the borrower.
What are the advantages of this type of loan?
Analyzing the options available in financial institutions, credit with property guarantee stands out for having lower rates and interest rates than other categories. See below what are the main advantages of this modality!
Availability of the percentage of 60% of the property’s appraisal value
It is worth noting that the credit to be offered varies according to the value of the property. The property undergoes an inspection, in which the person responsible for the stage stipulates the value of the property. The fidelity of the information contained in the evaluation carried out is reliable, since the analysis is made by an outsourced company specialized in the area.
After the assessment is made and if the loan is released to the applicant, the expenses that are part of the entire operation may be diluted between all installments. Among the expenses considered most common are:
- costs for opening credit;
- amounts owed to the notary;
- expenses with the evaluation of the property.
The expenses will cause a small increase in each of the loan installments and the person who will pay is not impacted by the increase in them. After all, the added value is so insignificant that it might even go unnoticed. For that reason, don’t worry about that detail.
Up to ten years to pay
Another benefit gained from taking out this type of loan is that the payment term is longer, which makes the installments fit in the customer’s pocket. The minimum period for hiring is three years and the maximum varies according to the contracted company, which can reach ten years.
As it offers a longer term, this modality attracts people of all age groups, but, mainly, entrepreneurs who wish to have working capital to start their own business or to innovate in an existing enterprise.
In other types of loans, payment terms are shorter, as banks want to receive the amount credited quickly. In this modality, as the property serves as a guarantee, the term can be extended without any concern.
Another positive point is that, in most cases, the plots are decreasing. In the beginning, they are higher and over time the values decrease.
To be sure that this amount will decrease over time, it is important to make a simulation and check what are the options used to amortize the amount.
One of the biggest concerns of those who take out a long-term loan is the interest rates of the operation. As financial institutions are afraid of default, they increase the interest on normal transactions.
But, as secured credit works differently, the lender does not have to worry about that part, and for that reason can offer lower and more attractive rates.
No need to hand over ownership of the property
Although your wellbeing is linked to a financing in which it is the guarantee, it is not necessary to leave the property after finalizing the negotiation and accessing the loan amount. You can continue to live in it until you decide to sell it to pay off the debt or until you finish paying all installments.
What really matters for the finance company is that the customer pays the installments on time to avoid any problems. In some cases, the amounts are deducted directly from the person’s checking account, which facilitates payment and prevents forgetting.
Credit value portability
Those who choose to refinance real estate directly with a bank have the advantage of credit portability. Therefore, if the person realizes that the interest rate is lower at another institution, he can request the transfer to the other bank.
Anyway, credit with property guarantee is an excellent type of loan, when compared to other lines offered by the market. The benefits are many and this money can be useful to get your plans off the ground, without having to compromise a source of income or the current budget.
The amounts can also be used to finance a second property or to settle old debts, which the borrowers were unable to repay. They can also be used to undertake or carry out other personal projects, which makes this option even more attractive.
Did you like our post about the opportunity to access credit with property guarantee? So, do not waste time and do your loan simulation right now!