Posts Tagged ‘home’
Increasingly, citizens need a guarantee that the bank granted a mortgage. Rising home prices, rising household indebtedness have meant that delinquency rates begin to skyrocket. This has contributed to tighter conditions for banks and savings give the desired mortgage, so they have a guarantor has become an essential element for accessing a home-ownership. In most cases the parents who respond to their children, but also resorts to the brothers and close friends. In any case, the guarantor must know the risks of such altruistic decision, because in case of breach of contract or loan default by the owner and respond in like manner as the debtor.
The endorsement is an additional guarantee required by the financial institution when, after making an economic study, believes the person who requested the mortgage is at risk of failing to meet the payment of dues. The bank usually ask for a guarantee if the customer has no payroll, although their incomes are high, or where the salary comes from a temporary contract. It is pointless for the applicant to ensure that it will soon be a worker with permanent contract and that its instability is transient because the entity will not risk. At other times, the customer has high income but can not justify its source-work made “black”, without invoice, and they are reflected in the payroll, so the endorsement is also required. Another case that requires an additional warranty occurs when a credit application is over 80% of the valuation of the property or when the person requesting the money has an older, according to the bank to meet all quotas. Furthermore, institutions are very sensitive to the applicant’s credit history. If it appears in the list of defaulters or in the past has left many unpaid debts, the situation is complicated. With all these requirements, most people need a guarantee if you want to buy a home.
Taking Responsibility
Here comes into play is where the guarantor is the person who voluntarily ensure compliance with the financial obligations of the holder and thus assumes responsibility for payment if the guaranteed fails to address their debt. Usually called the sureties have a fixed salary, a healthy current account or hold property.
Although sometimes they are siblings or friends who act as guarantors, in most cases the parents who support their children so that they can emancipate themselves. Paradoxically, this endorsement makes young people remain dependent on their parents even when they achieved their desired housing. Although often is the only way that the applicant must obtain the mortgage value the benefits and disadvantages that entails being guarantor and take into account that there are many risks involved in making this selfless decision. It is important to know that in case of breach of contract or loan default by the owner, the guarantor and respond in like manner as the debtor, so they will incur not only the unpaid assessed contributions but also the delays, insurance or legal costs if any.
Tips for the guarantor
The future guarantor should consider whether you really need their support or if there are other alternatives for buyers, like giving yourself time to get a payroll more stable, more solid savings or a decline in housing prices. Also there is the possibility of buying a cheaper apartment or starting on this adventure by renting a house with option to buy.
The guarantor has to take into account your current financial situation and their expectations for the future. In making the decision must weigh their own needs and those of other relatives who may need their help after a while. When endorsing a son or a friend sometimes do not take into account that the priorities may change and the guarantor may need outside financing that will be difficult to achieve.
If it is determined to endorse, the bank should agree with the best conditions for those who support the mortgage. Whenever possible, it should explicitly sign that the guarantor will be informed of any delay in the payment of mortgage payments for a small non-payment does not result in a seizure of their property. While this is to be presumed and guarantor trust the borrower never hurts to put in writing. It is also important to ask to be informed of any changes in loan terms.
Banks usually enter the compensation clause of debts and credits that allows the entity to pay his debt the borrower taking deposit the money directly from the guarantor. To the extent possible, should reject this charge, even if the bank does not always allow. Nor should sign the “express waiver of the benefit of exclusion and division order” that gives the bank the possibility of seizing the guarantor that is more accessible, where there is more.
In general, it is essential to read carefully all the clauses of the contract and ask what is not understood to workers of the bank as to any qualified adviser.
The risks of being guarantor
The guarantor supports the holder personally and can sell, if desired, its assets and properties will continue to provide security because the new assets. However, even when it comes to pay anything, these assets are compromised and may reduce the capacity of guarantor to access funding if needed in the future. That is, if you want to buy another house you can sell it but will be harder to ask for a mortgage with a monthly figure as high if guarantor of others.
The guarantor must know that if your estate is large, can serve as collateral to many, many as the bank deems appropriate. But in the case that its assets, your personal checking or payroll are more modest, their ability to endorse will be reduced. Is a factor to consider in the case of a father or a mother with several children. It can support the situation where one of them involves not being able to do the same with the rest, which can become a source of family conflict.
Often believe that the guarantor is only liable for the debt when the bank has failed to get the money from the mortgage holder, but this is not always so. If no payments have been made in a timely fashion, the lender can proceed to collect from the guarantor instead of seizing the borrower, but it has cash to pay what you owe. Although I would expect the bank to remain in first place with the mortgaged property, it need not do so and is entitled to garnish, if you prefer, the assets of the guarantor.
It is also likely that the bank ask the guarantor to have a deposit in the body and forces him to keep a certain amount so that if the mortgage holder defaults, the bank can automatically pay off debt money from the person who has backed the loan.
Also often thought that if there are multiple guarantors, all respond equally, and the debt is divided equally among them. In the case of a couple who ask for a mortgage and have the support of parents and in-laws, that is four people, one may think that every one of them, or each partner responds with equal assets. This is not true, as the guarantor bank charges which it considers more accessible, the more money you have or the one whose assets are easier or more interesting to attach the entity. In this circumstance in which the guarantors are parents or in-laws can be given another situation even more complicated, and it occurs separation from partner and holder of the mortgage guarantors have to deal with the debt of his former son – or daughter. Many times mortgages 30, 40 or 50 years are more durable than a marriage.
Guarantors are not bank any information on compliance with payment obligations unless expressly established in the contract and the mortgage holder has consented. If not, you may have the first news of default of payment is a legal notification.
Unpaid mortgage
What happens when the owner does not pay? Typically occurs where the first default of payment of the mortgage, the bank will contact the borrower because it can be a mistake or an oversight. If not, and still owe the customer deadlines are charged interest for late payment can also be borne by the guarantor. Where there is a real economic problem that precludes the payment of money by the owner, it is possible to extend the period for repayment of credit provided the bank and the holder agree. This would reduce the money to pay for each share but would increase the total because the longer it takes to repay the loan plus interest must be paid. In case this is not possible, the bank initiated a lawsuit against the borrower and guarantors, which, if accepted, could lead to the seizure of the mortgaged property or money, payroll, or both goods and property holder and the guarantor. Ultimately, these properties can be auctioned to cover the debt.
When a person who has endorsed the claim had been obliged to meet the payment of money owed is entitled to demand payment the borrower and thus became the holder of the loan creditor. If for any reason the debtor could not pay the amount asked the guarantor, it may require the sale of the mortgaged floor to collect the endorsement.
The guarantor also will be for the duration of the mortgage, unless pacte a given period or that the loan is amortized by an amount, and responds with all present and future heritage. For this reason, be cautious and take into account that conditions today are not the same as they will in a few years. Be guarantor for several decades is a decision that deserves to be pondered, weighed and measured in all its aspects and consequences.
If the dealer does not pay, or pay exorbitant interests, individuals lend to each other. This is the philosophy that lies behind a recent phenomenon known as P2P Loans, Peer-to-Peer Lending. Getting credit for a particular via the Internet is relatively new in some country, but not in the U.S., where this business model has already served four years. But loans are also known as P2P in United Kingdom, Germany, Italy or Japan
Confidence
One of the most important person to person lending is trust. In the traditional offline model, this trust is placed by the lender in which the borrower and is based on the existence of a strong hope in returning the borrowed. This means knowing the person you are going to ask for money and have a relationship close enough so that he would not “trust” and pay the money. The trust must be generated a priory, assuming a prediction of fulfilling a commitment, a statement about what is uncertain and can not be verified, in this case because it refers to a future outcome that will service the loan, plus interest. The advantages of this method is that it eliminates the bank as an intermediary, putting together web sites directly to lenders who need to borrow, with the advantage of obtaining lower rates than they would at a bank or through credit cards, as lenders get high returns on their investment, at least higher than depositing money in a bank.
Individuals ‘bridge’ to the Bank
P2P Loans offer citizens the possibility of social lending, a new form of financing carried out directly by people willing to lend money. Before the economic crisis in which we find ourselves, traditional financial institutions becoming more expensive credit. Whether done through friends, relatives or strangers on the Internet, people are turning to micro subsidiaries responsible for granting loans, instead of going to lending institutions such as traditional banks. This trend is experiencing a growing popularity because it offers often at rates more favorable than they can provide traditional lending institutions. For its part, the person offering the loan also benefits from this type of transaction, as you gain greater economic return compared to what they would put their money into a conventional investment method, receiving higher interest rates directly from loan recipient.
Introduction to loans per to per
Hardly anyone would lend money to a stranger. Thus, in cold, very seductive idea. But new technologies, Internet and development of social networks have brought consumers a new way to seek funding and lend (invest) certain amounts in exchange for an interest. Platforms are loans between individuals: anonymous citizens who solve their money problems, without the intermediation of traditional banking.
P2P Banking concept comes from a very common practice done throughout history, long before the development of the banking system or the use of currency. The loans made directly from family, friends or acquaintances have always been a source of funding for those who need liquidity. Normally, the amounts provided are small compared with the agreements of the big banks so that shape what we would today call “micro finance.” These loans are generally without collateral or guarantees, the money is paid based on a previous relationship that allows the loan, the collateral for these loans is done on trust.
If you are really interested in the social aspect of this “skipping to the bench,” becoming a bank yourself.
Bidding System
The mechanics are straightforward. If the borrower is trusted, starts an auction among lenders interested in taking that risk in exchange-course-of a juicy rate: between 8% and 10-12% in most cases. A higher level of creditworthiness of the borrower, the lower the profitability, because it assumes less risk. One also minimizes that risk because it lends itself to many different people at once. Borrowers can apply for up to 50,000 euros to pay a maximum of four years
Before buying or renting a home, consult the planning. We indicate the possibilities offered by new acquisition. Here’s overall planning legislation for a municipality to understand, to some extent, restrictions on property rights from the urban area.
a) A municipality is equipped with a General Urban Plan or of a subsidiary rule which classifies the entire floor of its municipal level. The classification can be:
1. Urbanized: Is that where existing buildings or can be built in the future, as it has the necessary equipment, such as vehicle accesses, water, electricity, disposal of faces, and so on.
2. Developer: The rules allow future construction but prior owners must transform the urban soil. Should be conducted in the urban development work required to provide the necessary ground equipment mentioned above. In addition, the City may require to carry out more works, how to make vials of communication, communal reserve land for endowments: schools, malls, parks, etc..
3.No urbanizable: It is one in which they cannot be built or planned in municipal planning for the possibility of building in the future. In these areas can be undertaken only rehabilitation of existing buildings, sometimes in addition to limitations in the case of ground specially protected natural interest, historical, archaeological, and so on.
b) In addition, these planning requirements not only provides the possibility of building but also the volumetric buildable, i.e. the surface building (two floors, three or four). It also details the types of housing: single family, townhouse, collective housing grouped etc. And it uses that can be given to such housing: residential, commercial, site host, etc.. Even set out specific rules on how to build. In view of this, we must act with caution when purchasing land or urban dwellings whose situation is unknown. The potential use edification or regulations will be marked by the urban municipality in which the property is situated . To know the classification of the land registry just go to the municipality and request the urban form of the land or housing that interests us. These records are public and freely available to any citizen. It is important to complete this process to avoid surprises and reliably meet the characteristics of purchase.