Property consolidation, also known as home equity , is a cheap option for those who need a loan with high value and own a land or property. This money has no restriction on use, and can be used to pay off high interest debt, take a trip, invest in a business, or perform whatever your dream or need is at the moment.
In this post, we will talk about how consolidation works, what you need to do to get the credit, and in what situations it is appropriate. Check out!
How it works
In this type of credit, who owns a land or property in his name, be it residential or commercial, can offer it as collateral in exchange for a loan of up to about 60% of the value of the property.
Since the property is a “safe” for the bank, the bank can charge much more advantageous interest rates, which come to beat those of the overdraft and those of the credit card. In addition to low interest rates, consolidation offers long repayment term – up to 300 months – and quick money release. The whole process can be done in up to 45 days.
Stages of Real Estate Consolidation
After researching the best rates and conditions and choosing the right bank for your case, the consolidation process will follow the following steps:
- Credit analysis: the amount of the loan will depend on the income of the applicant;
- Legal analysis: to check if there is no judicial pending concerning the property that will be used as collateral;
- Analysis of property: in this stage, the bank makes an assessment of how much the property costs, to determine the value of the capital that will be raised;
- Issue and signature of the contract: the two parties agree and sign the contract details, which will be subsequently registered in a notary’s office for the release of the money.
Who can request
Anyone with property in their own name can apply to a bank, however, the portion of the loan will be restricted to the limit of 30% of the net income of the applicant.
Even if you already have other debts, such as the financing of a house or apartment, you can apply for consolidation, including to take them out.
Imagine, for example, that you own $ 50,000 of credit card debt. You can request a refinance in this same amount by making the payment to the bank that issued the credit card and replacing the debt with a lower interest rate.
The consolidation of property is a great option for those who want to save with high interest rates, allowing the concentration of debts in one, as well as for those who want to raise capital for various investments. Many banks offer this line of credit, so research and stay tuned for rates and conditions! By making good financial planning , consolidation can be a great choice for anyone who wants to become a saver and, in the future, an investor!
And you, in which profile does it fit? Do you have any debt that you need to pay off and found consolidation a real estate solution? Comment on our post and tell us more about your financial control!