Mortgage guarantee is a right that is granted to an individual or organization in the form of real estate because of some debt or commitment made. In case of non-payment of this debt or commitment, the creditor has the possibility of becoming the owner of the property or selling it to recover the money borrowed.
Mortgage or mortgage-backed loans
It is important to highlight the differences between mortgage loans and mortgage-backed loans.
Mortgage loans are those required to purchase a property. For this, it is necessary to credit a stable and solvent economic situation that allows facing the loan installments, however, in turn, the property itself works as a mortgage guarantee, which means that the payment of installments cannot be complied with, thus , the property goes into the hands of a bank.
These loans often grant a maximum amount of 80% of the house and usually require a calculation of the property to be purchased and a prior study that accurately proves the loan installments and does not exceed 35% of the proven income .
Mortgage-backed loans are offered as collateral for a property or property that has already been repaid, however, on certain occasions, it is possible to lose this property if payment is not made in full.
This type of mortgage loan allows access to certain amounts of money higher than what can be obtained with a personal loan. In addition, they allow the asset offered as collateral to be sold whenever the money received is used to pay off the loan.
The mortgage guarantee allows you to settle difficulties that would otherwise prevent access to credit
As it is a guarantee of great value, there are many lenders willing to offer money even to people who cannot prove income or who have a negative history, thus, they offer a mortgage guarantee for the payment of the loan, usually more than enough to cover a possible default.
However, mortgage-backed loans do not only have advantages, as there is a risk of losing their home if they do not meet their payments.