The private equity mortgage loan is an absolutely feasible option when it comes to obtaining liquidity.
What is really very important, from the point of view of the client, is to be clear from the beginning where the financial need lies and, above all, what is its financial profile.
What is a private equity mortgage loan?
A private equity mortgage loan is, as its name suggests, a loan for an amount of money in which the borrower (or a guarantor) has to provide a property that acts as a guarantee (floor, house, villa, commercial premises … ).
The entities that make private equity loans with mortgage guarantee are essential to comply with the requirements established in Law 2/2009, of March 31, which regulates the contracting with consumers of loans or mortgage loans and brokerage services for the conclusion of loan or credit agreements. Among other issues, said law makes the registration of all the companies dedicated to the realization of this type of loans obligatory in an Aecosan Registry .
Differences between different types of loans?
It is key for a good financial advisor to be able to identify and differentiate the different types of loans that exist in the market and, above all, he must be aware of both the financial profile of his client and the concrete need for liquidity to be able to direct him towards a solution suitable for your specific case.
It is important to differentiate private equity mortgage loans from mortgage loans to buy housing ; although in both cases it is necessary that there is a property that acts as a guarantee, they are two totally different types of loans that have nothing to do with each other.
To begin with, the legislation regulating both types of loans is totally different, leaving the mortgage loans to buy housing in exclusive land of the banking entities.
Another crucial aspect that any individual must have clear before going out to look for financing to the market is the difference between a loan with mortgage guarantee and a personal loan.
In personal loans, the main criterion that will be taken into account at the time of granting the loan will be the level of income that has, the type of contract that is enjoyed and the lack of a history of default or delinquency in the client (this is the appearance in any delinquency file), while in a loan with mortgage guarantee the fundamental requirement is to have a property that acts as a guarantee , whether the owner is the client itself or whether it is provided by someone willing and willing to endorse.
Personal loans are recommended especially when the money is going to be invested in what is known as consumption (buy a car or a motorcycle, take a trip, celebrate a wedding or a communion …) and when the amount requested is small or, in any case not very large (for example, less than € 6,000).
When is the private equity mortgage loan the best option?
Private equity mortgage loans are the best financing option when any of the following circumstances occur:
- The amount is medium or large, superior in any case to € 6,000
- There is no possibility of accessing bank financing, usually due to the appearance in some type of delinquency file (rai, …)
- What you intend to do is a reunification of debt or cancellation of an embargo , to group the outstanding debts into one and thus obtain a lower monthly fee.
- Finance the expenses of an inheritance.
- If you intend to sell a property and seek liquidity until the sale occurs.
- For self-employed or people with stable income but with short-term contracts.
Loans with mortgage guarantee from € 6,000
We make loans with mortgage guarantee from € 6,000. Under that amount it is not advisable or feasible to make a mortgage loan. The maximum amount that the client may request is 30% of the current real sale value of the property that acts as a guarantee.
Private equity mortgage loans can be made independently of the appearance in delinquency files such as . In fact, if the client is in one of these files, the only possible financing option in the market is precisely this one.
Loans with mortgage guarantee to reunify debts
If what is sought is to make a reunification of different debts and loans that a client has to give viability to their payment by refinancing with a lower quota, the private equity mortgage loan is without a doubt the best option. And not only for the fact of distributing this debt between more years but this is produced, above all, by the fact that the interest rates of these loans are usually, in general, lower than the interest rates of personal loans and credit cards, which represent 90% of the existing debts in cases of debt reunification. In this way, the fee payable each month can be reduced in some cases to half of the amount paid monthly before realizing the regrouping.
Loans with mortgage guarantee to finance inheritance expenses
Receiving an inheritance can become, depending on the case, an authentic nightmare. Accepting an inheritance means paying in advance a series of essential expenses to be able to award you the inherited property; We can separate these expenses into two large groups:
- Notary fees, lawyers, registration …
- Inheritance tax
According to the autonomous community in question, and the degree of kinship with the deceased, these expenses can become totally unaffordable, especially taxes, generating a financial problem for the future of an heir that can be very difficult to solve. Subsequent
Private equity mortgage loans offer the possibility of financing these expenses , making their payment feasible by paying comfortable monthly fees, and above all they make it viable to obtain financing before the client has the property registered in his name. in the Land Registry saving the additional expenses derived from delays and delays in the payment of taxes and other fees, since this type of loans are signed in the notary in the same act in which the inheritance is accepted.
Mortgage loans while selling a home
The private equity mortgage loan is also highly recommended when you are selling a home or property. First of all, this implies three advantages to be taken into account regarding the same type of loan when this property is not being sold:
- In the first place, in these cases, 40% of the current real sale value of the property that acts as a guarantee can be lent.
- It is not necessary to provide income, since the sale of the property justifies the repayment of the loan
- The comfort in the return of the loan is greater, since in these cases no monthly payment is applied and the loan is returned once the property is sold within the agreed term.
In this way you can get a sufficient liquidity to allow yourself to wait in the market until you get a good sale of the property and not have to “sell it”.
The two key criteria for granting a home equity loan
Once a feasible request arrives to our office, we study its viability through the basic documentation provided by the client. It is important to bear in mind that in this type of loans it is also essential to have some type of income (except for a property that is being sold) in order to obtain a positive rating.
The award criteria that we follow in our office are very simple and can be summarized basically in two very clear factors :
- The total amount of the loan must not exceed 30% of the current real sale value of the property that acts as a guarantee (40% if there is a sale of a property).
- There must be sufficient income to be able to cope with the monthly installment comfortably (the monthly fee to apply should not exceed in any case 35% of the income of all participants in the operation).
If you are identified in any of these situations reflected in the article, do not hesitate to contact us and request your free study without commitment to our financial analysts.