Real estate loans are loans where the principal security for their repayment is the establishment of a mortgage on the property. With the launch of the loan, the first entry in the land and mortgage register of the property is entered, where the lender will appear.
Loans against real estate are usually granted by private companies and individuals, non-bank and banking institutions. These entities have methodologies for granting loans that particularly score mortgage collateral, thanks to which the ability to obtain a loan is acquired even by people with low incomes or unstable employment.
“I am looking for a real estate loan” – which one?
“I am looking for a real estate loan” is a common post on online forums. Those interested in such a product still have doubts whether such a loan is safe, how to apply for it, where it can be obtained. In this case, the action should be reduced to several stages, namely:
- Finding the right company that provides loans secured by real estate, it is worth using Internet search engines, get to know the offers described on the websites of companies
- Make a comparison of available loans, in particular costs,
- Consulting with the company’s representative the conditions for starting the loan, checking whether any property that the future borrower possesses meets the expectations of the loan company as an acceptable repayment security,
- Careful verification of the proposed provisions of the loan agreement, parameters of the commitment presented in the information form.
Is a loan against real estate a safe solution?
A real estate loan is a safe solution because:
- Establishing collateral for the repayment of liabilities on real estate is a legally permissible activity, regulated by the provisions of the Civil Code
- If the debtor repays his liability in a timely manner, the bank or lender will not assert its rights from this property,
- Repayment of the liability to the lender results in the deletion of the mortgage entry, so it releases many thousands of Poles in Poland, incurs such obligations, repays them on time, releases their property after paying off the debt. There are no irregularities or dangerous activities in this respect.
Real estate loans – what does the repayment security look like and what are the consequences?
In a situation where the debtor who has an active loan against the property is not repaying it, a negative scenario is possible, i.e. enforcement against the property. However, for this to happen, the standard debt collection and enforcement procedure takes place earlier:
- Summoning the debtor to pay by phone, SMS, prompts, field debt collector visits, conducting talks with the debtor at the amicable stage.
- After a prolonged period of refusal to repay the debt, e.g. failure to pay at least several subsequent loan installments, sending a notice of termination, indicating the notice period.
- If the loan is not repaid within the specified notice period, the notice becomes active.
- Referral to the stage of court proceedings, issue of an order for payment.
- Enforcing repayment of a loan from a secured property, most often in two ways – enabling independent sale of the property to the debtor and repayment of the debt at the bank, unless the debtor does not take advantage of this proposal, independent lending of the property by the lender.
In an extreme form, if the loan is not repaid on time, the property may be sold and the funds obtained will be transferred to the lender’s account to pay off the debt.
Is it reasonable to set up a loan repayment security? Will I lose my property given as a loan?
Establishing a loan repayment security has its advantages and disadvantages. Of course, there is a risk that if the loan is not repaid, the property will be lost. Nevertheless, this is a very extreme situation. In addition, lenders are now very preferential to their clients. Before deciding on legal proceedings and seeking repayment of real estate loans, they give the debtor many amicable options for repaying the liability.
It is also a very honest solution to enable the independent sale of real estate to the Debtor. Then it is possible, for example, to sell the property for a high amount (sufficient funds to repay the debt with the Lender, as well as the rest for own use). This solution is for many debtors the opportunity to sell real estate to a loved one from whom it is likely to be bought back for some time. However, thanks to such protection, many people can get the resources they need when they are not able to do it themselves. Therefore, it is a preferential solution and worth attention in many cases. A real estate loan is a chance to get out of other serious debts when banking and loan institutions refuse to grant a loan to a person without such collateral.