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Classic Mortgages – Loans

After mortgages on movable property, we may switch to real estate loans. Mortgages are loans that allow you to take out the largest amount – or place it, a matter of perspective. If a debtor wants a large amount of credit, what kind of collateral can he give the bank, which is expensive enough for a financial institution to recover up to $ 100 million, even if the debtor is not paying?

 

The solution can only be one property

The solution can only be one property

Unfortunately, this arrangement also carries the risk that the debtor will lose everything. It is true for an individual, but also for companies, that he does not have enough real estate to barely feel the loss of one or even to break it if he does. The biggest problem is that the collapse of mortgages and mortgages marks the end of a cumulative process. The debtor loses his job, his clients, etc., goes into insolvency and then only the auction comes. Since the debtor’s home, business, land is being auctioned just because his owner is in misery, there is no way out: it doesn’t happen that someone somehow saves his real estate, because what would he do?

 

Can we think of moving us out of our home, where would we go?

Can we think of moving us out of our home, where would we go?

Maybe only a couple of weeks until we find a sublease, but maybe a year, because even the sublease does not have the money – and of course not much work, because then we would not be in this position. And if you have to move to relatives without a fit (your friends will drop out, and in this case you might not be blamed for not welcoming us for months, years), then again, there is not much hope. Mortgage loan is a very popular form of loan until you crash. Now we see why.

By the way, mortgage loans are typically issued by determining the market value of the underlying property, taking whatever percentage it is, usually 70-80%, and finally another percentage of this value, again 60-80%. % and that is how much they give to the debtor. So we finally get about 50% of the market value of the property. If we can get a very good credit, maybe 60-70%, but you have to be very careful. Although it seems like a good deal at first to get such a large portion of the market price of the property you are renting, it does come with a higher repayment rate and therefore a higher risk of default.

 

The debtor wants more money

The debtor wants more money

Who can do this? Who can do justice here? The debtor wants more money. The bank wants to insure itself as much as possible. If the latter does not allow, then they say why not, because the real estate there, anyway, get his money. If the former does not allow you to say, you are right, because once you need X, how do you get it with Y, which is obviously less than what you were originally talking about. But it would be up to both parties to weigh up the risks, and then let the one who could do it easier.

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