When is it worth using a mortgage?

A mortgage or housing loan is a great solution for people who are looking for their own housing but cannot finance it with their savings. On the other hand, a mortgage loan will be convenient for those who are in a reverse situation – they already have property but need cash.

High amounts available to (almost) everyone

Regardless of whether you decide on a mortgage loan in a bank or non-bank institution, this is a solution for those who need really high sums of money. In such situations, the room for maneuver is usually limited. Why? Let’s start with the easiest and fastest way to get cash: a non-bank loan, usually an online one.

Such loans are of course very convenient, fast and devoid of formalities, which means that even people with good creditworthiness reach for them. What’s more, the offer that non-bank companies can offer is really wide, which means that with a little help from a loan comparison tool you can easily choose the most advantageous and best suited loan. However, there is a snag – the amount of the loan. It is true that the maximum quota ceiling is much higher than a few years ago, but they are still rather average amounts.

If we need a really large amount of money, then we are unlikely to decide on payday loans – even if you can get up to 7,500 , 8,000 or 10,000 USD . Thanks to installment loans you can get more – up to 20 thousand dollar at GFI. Some also use a car loan (up to USD 100,000). However, even they may be insufficient and you have to take into account the fact that you must first have a vehicle of adequate value.

Meanwhile, mortgage loans are really large amounts, usually reaching several hundred thousand dollar. A non-bank mortgage loan at Good Finance gives the possibility of obtaining up to USD 5 million if the pledged property is worth this amount, although it must be remembered that the loan amount will not be greater than 60% of the property.

Another important issue is the ease of obtaining this amount of money compared to a regular bank cash loan. It is true that you can get up to several hundred thousand dollar using this form of financing, but you will need a really high creditworthiness, high earnings, high financial credibility (and a very rich repayment history), and in addition also another source of security – usually a guarantee.

A truly long-term mortgage

Mortgage loans are especially recommended for those who are unable to pay back a high amount in a short period of time – a cash loan usually closes within a period not exceeding 10 years. Such a short time in relation to the amount of the commitment is too burdensome installments, for which the repayment can easily get a leg.

The longer repayment period, on the other hand, gives you greater certainty that the loan will be repaid without any disruption and risk of final property attachment. This does not mean, however, that you do not need to be careful. A mortgage with a long repayment period will work only if the borrower has a permanent, very stable employment and does not have to worry about sudden cut-off from the funds.

Money needed for any purpose

money

Mortgages, especially non-bank loans, are often not targeted financing. This means that they can be taken for any purpose from which the customer does not have to translate or settle (unlike a cash loan). However, in some cases, banks may prohibit the use of loan money for speculative purposes, including for investment in stocks. However, those who want to invest may take advantage of a non-bank loan, which is unlikely to apply such provisions in the loan agreement.

You don’t always have to own property

In crisis situations, even those who do not own real estate can take advantage of the mortgage loan. Some institutions may agree to grant financing against a third party mortgage – and it may not even be related or allied. The basic condition is only that the property owner agrees to establish a mortgage.

Risk-free mortgage loans

As a summary, we will mention once again that mortgage loans will be perfect in situations where the borrower needs a large amount of money, prefers to pay back the loan for a long period and wants to spend money for any purpose (or purposes). Non-bank loans will not yet exclude people who do not have a good credit history and are even indebted. So they are perfect for those who want to quickly pay off high debt, but do not want to sell probably the most valuable things they have – a house or apartment. Thanks to the mortgage, they can continue to live and use it as their property.

Mortgage pledges, however, carry some risk. First of all, it risks losing property and considerable costs resulting mainly from large amounts and long repayment periods. Therefore, it is not always enough for the creditor to sell the property to cover the sum of the liability and interest. This should be borne in mind and remember that liability for the commitment increases in proportion to its amount.