Definition of Mortgage Guarantee

As a general guideline legislation states that by contracting a obligation with another person it may be necessary to offer you certain guarantees in the event of breaching the agreement. In this sense, when we request a loan to start a draft, the entity financial who offers us the money can ask us for a guarantee, for example that of our own home. In this case, if we do not pay the fees agreed with the financial institution, it can keep our property, in such a way that the house acts as a guarantee of payment.

Features of Home Equity Loans

A mortgage is understood as a loan granted by a financial institution with the guarantee of something, normally a real estate.

Home equity loans are a chance for those people who have difficulties to obtain a loan and who cannot justify some income newspapers. In this sense, they have the advantage of allowing you to obtain an amount higher than that offered by a personal loan (in Sometimes home equity loans are granted even if the mortgage has not been paid in your whole). However, as

rule In general, the bank interest of the mortgage guarantee is higher than that of a personal loan. It can be said, therefore, that they are useful to obtain a large sum of money but there is the risk of losing the property.

It should be noted that the home equity loan is a financial operation with few requirements for hiring. In addition, it is not accompanied by the obligation to contract other products related to the loan. It can be requested by individuals and also companies, since the only condition that is required is to put a property as a guarantee.

When a home or property serves as a mortgage guarantee, there may be two circumstances related to the ownership of the mortgaged asset.

That someone is the owner of the property and is using it (for example, someone who lives in her own house) or, on the other hand, that someone is the owner of an asset already mortgaged previously by another person and who once used the home as collateral (in the latter case, the mortgage is subrogated at the time of acquiring the living place).

Finally, home equity loans incorporate two types of responsibilities: the personal guarantee of the borrower and the real property guarantee.

Photos: iStock - kokouu / ilbusca

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