Did you know that Mortgage and Home Secured Credit are different things? Confusion between terms exists, but we explain the difference to you. See barsugliafarms.com for further editorial
Have you ever wondered how the word mortgage became a villain and how so many people are afraid of it? Yeah, but know that there is no reason for all this fear, see? It gained this frightening profile when, in 2008, in the United States, the so-called “American bubble” exploded, leading the country into a widespread economic crisis over subprime mortgages , also known as “rotten mortgages.” What happened was that many banks lent higher amounts than the value of the property and also to those who could not repay.
So a lot of people think that putting their property as collateral on a loan means you have a great risk of losing it. But this thinking is not correct, especially as it is not advantageous for the financial institution to take a property. The intention and interest of the institutions is to help those who have to meet their debt repayments.
In addition, here in Brazil, the values of loans are controlled and generally correspond to up to 50% of the value of the property as collateral. Which makes the case of repossessed property almost irrelevant; since there is no reason to “lose” equity at half its value.
Understanding the Difference Between Mortgage and Home Secured Loan
Here at Pcredi we offer Home Secured Credit , also known as refinancing. As far as the concept is concerned, this type of credit is confused with the mortgage, but the concepts are different and none of them is this seven-headed bug, as you’ll understand right now.
First of all, it is important to note that mortgage is not a form of credit; It is a way of contracting credit combined with collateral, collateral. The Credit Guarantee with property also consists of offering a property as security for hiring credit. The difference is precisely in this new guarantee that is established between the parties in this case: the chattel mortgage . This new way of contracting credit emerged as an option to the s various legal barriers that make the procedures of the slow and labor – intensive mortgage.
Keeping the name of the lender tied to the property until the loan is completed has brought more security to lenders and benefits to borrowers: better rates , terms and conditions. This is because the guarantee reduces the cost of the operation and the institution may charge lower fees .
That is, now that you know that, it’s easy to understand why the US strategy didn’t work out and the bubble burst. It was not the mortgage’s fault, but the banks’ lack of discretion to grant them.
What is mortgage?
For a better understanding of the mortgage concept and how you can get credit using your property as collateral, check out the video below.
Is it worth opting for refinancing?
Property-Guaranteed Credit is a credit line indicated by consultants, as it has the lowest interest rates and offers one of the longest payment terms. Even so, when it comes to placing the property as collateral, many people think, “The bank or the financial institution wants to take my home.” In fact, it is just the opposite , so much so that the rate of real estate that is actually going to auction is very low in Brazil. The property for the lender acts as the net for the trapeze artist: he has the security of knowing that it is there but does not intend to use it.
But rest assured: Offering a property as collateral is a smart way to cheapen the cost of money you need. Here at Pcredi, you will find the best healthy credit options in services like Home Secured Credit . You can trust, because we will always be by your side to help you pay off debt the best way for you and your pocket!
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