A loan secured by real estate is a type of secured consumer loan. The bank gives the borrower money, and the property will be a guarantee of the return of funds. In case of non-repayment, the bank will be able to sell the collateral property.
Different circumstances happen in life, and sometimes a loan secured by real estate at https://kreditgroup.ru/kredity-pod-zalog-nedvizhimosti/kredity-pod-zalog-kvartiry can help resolve the current situation.
For example, an elderly couple and their adult son with his family – his wife and two schoolchildren – live together. A young family wants to modernize their dacha for permanent residence of their parents: install gas, expand the house, make repairs. Banks are ready to give a loan, but the spouses’ income is not enough for the bank to approve the required amount, and the parents, pensioners with no income, cannot be guarantors. And I want the rate lower than on a regular consumer loan. This is where real estate plays a decisive role. Even if the apartment is the only home for the borrower or minors are registered in the apartment, this is not an obstacle to the pledge.
Or another example: an entrepreneur is the owner of a small business that needs to be developed. He plans to rent premises closer to the metro, at a more accessible point, with a large flow of clients, and buy new equipment. In this case, in order to temporarily support the business and reach a new level, a loan secured by real estate can also help it.
Advantages of a loan secured by real estate
- Loan amount is greater
You can receive up to 15 million rubles depending on the value of the collateral property. As a rule, the loan amount is up to 75–80% of the value of the property.
- Long term and monthly payment
Repayment period is up to 15 years. If you break a large loan amount over a period of 10 to 15 years, the monthly payment amount will not be so significant.
- Rate lower
Rates on a loan secured by real estate are significantly lower than on conventional consumer loans.
- Easier to get than a regular loan
A more loyal attitude towards the borrower: a loan may be suitable for those who have a low scoring score and a less than ideal credit history.
- For any purpose
A loan secured by real estate is non-targeted. This means that you can spend the money on anything without notifying the bank: build a house, buy another apartment, or make renovations.
The disadvantages include:
- The process of applying for a loan is a little more complicated: you will need the borrower’s documents and real estate documents;
- restrictions are imposed on the real estate that will be used as collateral: the apartment cannot be donated, sold, or exchanged;
- the need for insurance, the refusal of which will lead to an increase in the interest rate;
- a loan secured by real estate is more difficult to refinance compared to a conventional loan;
- You can only use an apartment that you own as collateral; you cannot receive money for the purchased property;
- the risk of losing property due to financial difficulties.
Basic requirements for borrowers:
- age at least 18 years at the time of conclusion of the transaction, no more than 65 years at the time of loan expiration;
- citizenship of the Russian Federation, presence of permanent or temporary registration on the territory of the Russian Federation;
- having a permanent job or source of income for at least 3 months.