Mortgage financing is a particular type of loan, with specific characteristics that differentiate it from other types of personal loans.
This loan is often compared to a mortgage: although there is a mortgage in both, its characteristics make it a personal loan in itself.
Characteristics And Functioning
This type of loan, as the name itself indicates, provides for the signing of a mortgage to guarantee the repayment of the loan. This allows the bank or financial institution to be protected in the event of insolvency, which in this case will acquire ownership of the property subject to guarantee.
A characteristic that distinguishes mortgage loans is the amount that can be requested, which can also reach very high figures, depending on the value of the asset given as collateral.
The duration of the loan is also proportional to the value of the asset given as a guarantee and to the amount financed.
Generally, these types of loans have a longer duration than the average personal loan.
The specific characteristics of mortgage loans also vary greatly depending on the financial institution and can differ significantly. Therefore it is always advisable to choose after comparing several mortgage loan proposals.
To obtain this type of loan, the applicant must meet certain personal, economic, and income requirements.
What Documents Are Required?
A mortgage loan does not differ much from a regular personal loan as regards the documentation to be presented.
The applicant’s identification documents (identity card and tax code) and documents certifying an income (pay slip, tax return, etc.) are usually required.
The only exception is given by the need to provide documentation certifying ownership of the property, which must be 100%.
Otherwise, the people who hold the remaining shares of the property must authorize the registration of the mortgage.
As you can imagine, the evaluation of the mortgage loan application could take longer than that required for a common personal loan, especially depending on the evaluation times of the mortgaged asset.
Finally, we mention a particular form of mortgage financing, still not widespread in Italy, which is the mortgage loan.
When Is Mortgage Financing Worth It?
Mortgage loans allow you to obtain even high sums, depending on the mortgaged assets. Furthermore, due to the presence of this collateral guarantee, the obtaining criteria are more flexible than for other forms of loan.
Another advantage is given by the fact that mortgage loans generally have low-interest rates when compared to those normally applied for personal loans.
In any case, the risks in the event of non-repayment of the loan are high, so think carefully about your economic situation.
Before choosing a mortgage loan, you must carefully evaluate your risk of insolvency, and make sure that the mortgaged asset has a comparable value to the amount to be received.