Mortgage Guarantee
A mortgage is the guarantee that the owner of the property presents as a pledge of his obligation to repay the loan. In this way, when we go to a bank, what we ask for is not a mortgage, but a loan. And when we get the money, what we pay every month is the loan repayment installments, not the mortgage.
The mortgage is the guarantee that the bank receives from us and that is constituted with the public deed.When we mortgage our assets, we continue to be their owners, which is why we can sell, lease or mortgage them again, although in most cases the entity imposes on us the duty to consult it before carrying out these acts.
Advantages and disadvantages
Among the advantages of loans with mortgage guarantee are:
- It allows access to loans to people who do not have liquid savings (in a bank account, for example) for collateral, but do have a property that can serve as collateral.
- It gives greater security of repayment of a loan, so a lower interest rate can be negotiated than if you did not have that guarantee.
- Reiterating part of the previous point, the creditor may be more certain that he will recover the money lent.
- As we mentioned before, the credit can be used in different ways, that is, the debtor has free availability.
However, this type of financing also involves disadvantages or risks:
- The debtor can lose his home if he defaults.
- It could be requested that the property be paid in full. In that case, if the person lacks a year to cancel his mortgage loan, he does not qualify.
- The property must usually be exempt from charges, for example, pending taxes that must be paid to the municipality.
What is a mortgage guarantee on a home loan?
The mortgage guarantee is the guarantee presented by the owner of the property as a commitment to his obligation to repay the loan. Therefore, what we ask for when we go to an entity is not a mortgage, but a loan. And once the money is received, every month we pay the loan repayment installments, not the mortgage. The mortgage is the guarantee that the bank receives from us, as owners, constituted with the public deed, explain.
When we mortgage our assets, we still own them, so we can sell, lease or mortgage them again. However, in most cases the entity imposes the obligation to be consulted before carrying out any of these actions.
