What are the characteristics of the liquidity mortgage? The mortgage is a financing formula usually associated with the purchase of the main house or to manage renovations. There is another type of mortgage, the one for liquidity, that is conceived for those who need important sums to carry out projects. Let’s discover its potential.
Characteristics of mortgages by liquidity, amounts and rates
The liquidity loan is a credit line provided to those who have a property structure. This will in fact be placed as a guarantee of repayment and cannot be encumbered by a mortgage.
The loan amount does not, in principle, exceed 70% calculated in relation to the value of the home placed as collateral. Although it is the profile of the applicant and the bank’s policies that decide the sums paid.
The repayment plan has the characteristics of traditional mortgages, there are usually monthly installments calculated in relation to the interest rate and the costs that may affect the loan.
The aforementioned interest rate can be fixed, variable or mixed, this depends on the offer of the credit institution under consideration. If the mortgage beneficiary is self-employed, the sum that can be received thanks to this credit line does not exceed half the value of the home.
Loan term and advantages over loans
The liquidity loan is a competitive proposition when compared with an ordinary loan, provided that the amount requested is very important. The reason is simple: the mortgage allows you to benefit from lower rates, although the costs are to be carefully evaluated.
The mortgage provides for a heavy constraint on the home owned by the applicant. The repayment capacity must therefore be taken into account when entering into the contract, which must be adequate in relation to the characteristics of the amortization plan.
The maximum term is 30 years, this does not apply to traditional loans which cannot exceed 10 years. As for the limits of liquidity mortgages, we find more complex bureaucratic procedures.
The consumer must activate an insurance policy that intervenes for fire risk and other events capable of affecting the reimbursement.
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