It may be the case that, due to not meeting the requirements demanded by the bank, a user who wishes to access a loan, such as a quick one, cannot do so. This does not mean that he will not obtain financing, since there are other options such as, for example, a mortgage loan .

A product that can be confused with a mortgage loan, even though it has nothing to do with it. The latter, also called a ‘mortgage’, is the one requested for the purchase of a property, while the mortgage guarantee loan does not necessarily involve the acquisition of a home (it is usually required for a multitude of purposes). In this article we are going to explain, in detail, what this loan consists of, what its requirements are and what advantages and disadvantages it has. Keep reading!

What is a home equity loan?

A mortgage loan is one in which the applicant, in order to be granted, puts up a house that he or she owns as a guarantee of payment (paid at least 80%). In this way, and in the event that the applicant cannot meet the monthly payments, the bank may execute the rights acquired over the property, as payment of the debt.

Who can apply for a mortgage loan?

A mortgage loan is usually intended for people who are in a difficult time, financially speaking, because they have had to face some unexpected expense or, also, because they have some debt pending settlement. In fact, and taking this into account, it is a loan that can be accepted even if the applicant is on a list of defaulters (such as ASNEF, RAI or CCI). Likewise, it is a viable alternative for those who want to start a business and need high amounts for it, which do not require any justification.
mortgage-secured loan

What are the requirements for a mortgage-secured loan?

The mortgage loan does not require excessive requirements from an applicant. Thus, he/she must:

• – Be of legal age (over 18 years old).
• – Own a home (at least 80% paid off), which will serve as a guarantee of payment.
  – Submit the necessary documentation , along with your ID, which includes a property appraisal report and a registry verification report.
• What are the advantages and disadvantages of a mortgage loan?
  There are many advantages to a mortgage-secured loan:
• – The amount you can borrow is higher than other loans.
• – The repayment period is also higher than that of conventional loans (they are more similar to those of a mortgage).
• – It can be accessed even if you are on a defaulters list .
• – It does not require a stable income.
• – Allows continued use of the property that has been used as collateral.
• It also has a number of drawbacks:
• – The property may be lost if the mortgage loan installments are not paid.
• – The house used as collateral must be 80% paid (minimum).
• – Interest rates are usually higher .
• – Money usually takes longer to reach your bank account.

In addition, and depending on the bank where the loan is requested, fees and administration costs may apply for the mortgage-secured loan.