Need a loan and don’t know what real estate mortgage is? Check out our post with all the information you need to make a safe and quiet decision!
Amid so many financial problems Brazilians go through, many are looking for risky ways to make money. Either by loan with loan sharks or through companies that charge high interest rates, hiring credit should be done thoughtfully, responsibly and with minimal chances of losing even more resources. Among the safest forms is real estate refinancing , which includes real estate mortgage.
If you have a property in your name and are in need of financial credit , this may be your chance to recover. A mortgage is a form of loan that offers as security of payment your property, provided it is already paid off.
The practice can be a great solution for anyone who needs to renovate the house, pay off some debt or invest in a new business. However, one must be aware of the institutions that offer this type of service, research the interest rates and read the contracts carefully.
It is important to know that the mortgage is different from the secured home loan . In the guarantee, the property is sold, but the name of the lender is tied to the property until the debt is paid. This makes CGI offer more attractive rates and terms.
Want to know what real estate mortgage is and how it works? Can breathe a sigh of relief. We have prepared complete and enlightening content for you to answer all your questions and make the best choice for your assets and your family. Browse the links and check it out!
What is real estate mortgage?
Very popular in the United States, the mortgage is still the subject of doubt here in Brazil. In practice, we can describe it as a line of credit that offers a property as collateral for the loan , usually at lower interest rates than other loan arrangements.
The contract is made between the applicant and the financial institution, which provides the requested amount and now has real estate as collateral in case of default . By having this collateral, the home mortgage mode is more attractive and offers more advantages than conventional loans.
With more knowledge spread over the internet, the number of mortgages in Brazil is increasing today , making life easier for those who have debts and offering credit with easier payment.
Although the operation requires care, it can be much safer and quieter for loan seekers. This is because the property remains in the name of the owner , making it difficult for the property to be taken by the institution and facilitating payment agreements.
This should in no way favor default. It is important to remember that while the property remains in the name of the applicant, the contract allows the lender to take possession in the event of default on debts. The registration of the mortgage is included in the registration of the property in order to make the public modality for court cases.
Although the mortgaged property is the sole property of the family, the institution has the right to demand the property to repay the debt .
In the mortgage, it is not necessary for the owner to leave the property. The usufruct is guaranteed, once the property has been refinanced, that is, you can continue living in your house, will only go through new installment in exchange for credit.
How does the mortgage work?
For you to understand better, let’s explain now how the real estate mortgage works. It is done when a property owner needs a loan or financial credit to repay a debt , expand business, or invest in a new activity .
The applicant then seeks out a trusted financial institution to find out about the dynamics of the real estate mortgage. He will voluntarily provide his home as a guarantee of repayment of the loan, ie in case of default, the lender may take ownership of the property and resell it to meet these costs.
As the real estate guarantee is much larger than in the case of financing, where there is only proof of income, mortgage rates are lower, facilitating the reorganization of financial life and favoring the opening of new business.
It is important to remember that the enjoyment of the property continues with the owner, ie it is not necessary to abandon the property at the time of mortgage . Payments need to be made on time to keep your assets intact and secure.
What is a foreclosed property?
How does the mortgage work?
Mortgaged property is one that has been offered as collateral for loan repayment or refinancing. Although he is alienated by contract, he can still be negotiated by the debtor as long as the new buyer bears the onus of purchase.
If you decide to sell your mortgaged property, therefore, it is a duty to have a mortgage on the contract , causing the new owner to owe the installments to the bank.
The mortgaged property is also liable to be donated, assigned or inherited, but it is important to remember that the mortgage should always be transported to the new owner, at the risk of ownership of the property by the lender. It is also possible for the homeowner to take out a new mortgage on the same property , differentiating between first and second mortgage. This is what you will see in more detail in the following topic.
What is first and second degree mortgage?
Under the law, it is possible for the same property to be offered as collateral for more than one debt , even for different creditors. Each mortgage is related to a different degree.
A first mortgage, therefore, is called a first mortgage. The second, second degree.
In practice, the first lender has the preference of owning the property . It is necessary, however, that each new mortgage mention the previous one, otherwise the owner will be committing a crime of estelionato , according to the Brazilian Penal Code.
At the time of registration of the second mortgage, if the first mortgage has not been registered, it is the duty of the Real Estate Registration Officer to quote the first lender to submit his documents. If in thirty days this does not happen, then the second mortgage will have the rights of the first, including preference.
Who makes the real estate mortgage?
Brazil’s leading banking institutions mortgage the property. Mortgage from Caixa Econômica Federal, Banco do Brasil and Bradesco are some of the most sought after by those who want to secure the loan. In recent years, however, several lenders and lenders have begun to offer the mode, which contributes to lower rates, increases competition and favors a better choice by the homeowner.
Each of these institutions has its rules, criteria and fees applied . It is important, therefore, to inquire about how the mortgage works and how is the contract between the parties.
Remember that under no circumstances should the owner rely on private lenders or loan sharks . In addition to the fact that your debt may increase in value exponentially and at abusive rates, you are still in serious danger of losing your property even with days of late payment.
When done through specialized companies, however, it is customary to wait for three to four late installments before a court can be brought. Importantly, the legislation allows this to be done even after an unpaid installment within thirty days.
How to make the best choice?
There are many steps to getting you to the most trusted institution to take out a property mortgage. See below what they are.
Do a search
The first step for you to make a right choice when mortgaging your property is to conduct research on the institutions that offer it. Check the search portals for locations and check each company’s reputation with consumers.
Check the career path, look for consumer complaints and analyze if people are satisfied with the services provided.
This information is easily found on internet portals, such as those that gather consumer claims and rights. Enjoy and ask friends and acquaintances if they have any referrals or referrals; This can greatly help you choose the company with the most credibility for what you need.
Check Loan Rates
After filtering out the companies carried out above, it is time for you to study regarding mortgage interest rates . It is very common for financial companies to make this information available on websites, so make a table of all the numbers you find about the most trusted companies you rate.
See if the rates are within what is being practiced in the market and immediately discard any institution that covers abusive amounts for the loan. Also try to be aware of the advantages offered by the company.
It is important to know the interest rate so that you then do not get scared of the full amount of the payment. This prevents you from getting a debt that is difficult to repay and end up losing your property by neglecting this step.
Review other loan rates
In addition to the interest rates on the value of the property, it is important that you analyze other fees charged by the institutions . Ask the company what the Total Effective Cost of the debt will show you how much you will disburse over time.
This figure still shows interest rates and all mandatory insurance and fees built into the installments you will need to pay. In addition, you can see the difference between the appraised value and the total value, helping to analyze any abusive practice.
After that, be sure to compare Total Effective Cost with other institutions, remembering to take into account the same amount requested for credit. One idea for visualizing debt is to perform a mortgage simulation. See more about the following subject.
How to make a simulation of mortgaged property?
Most companies that offer home equity as collateral offer mortgage simulation tools. With this feature you can view the amount of the installments and the interest rate applied to the credit.
To do this, you will have to go to the online simulation page and fill in the amount of credit you want to get and the total debt repayment term. This time may vary from 12 to 180 months, depending on your needs and the amount requested.
Simulation makes it much easier for you to plan financially for a home mortgage, with less worry about payments and more relief for your financial life .
Once the company is decided, it is worth going to an agency to talk to managers and negotiate in a win-win way.
What documents are required for real estate mortgage?
Now that you have decided on the company that will grant you the credit, it is time to prepare the paperwork for the order. Keep in mind that a credit review will be held to free your funds .
See the list of documents:
- ID and CPF of the holder and spouse, if any.
- Wedding certificate.
- Deed of the property that will be mortgaged.
- Proof of income.
- Proof of address.
- Certified copy of the purchase title of the property
- Original and updated certificate of the circumscription of the property.
- Original certificate of entire Registration Number, with negative charge.
After that, just wait for the financial response and plan what you will do with your resources. If your name is on a credit protection body, such as the Credit Protection Service, it is important to pay off the debts contained in the restriction to facilitate the release of the requested amount.
How to cancel the property mortgage?
According to the Brazilian Civil Code, the mortgage may be extinguished under certain conditions:
- When the debt is paid.
- When the lender expresses debt forgiveness.
- When the mortgaged property is sold or negotiated. In this case, both the creditor and the new owner must be notified in court of the transaction.
To cancel, you must attend the Real Estate Registry Office with the debt settlement statement offered by the lender. It is important that this document is notarized and has the address of the mortgaged property, the mortgage registration number and the certified copy of the document authorizing a representative to sign the debt settlement.
When should I get a mortgage?
As we said, it is essential that real estate mortgages be done responsibly. When done with caution, it can be very beneficial, especially for those who have clear and outlined plans for using the money. See when this credit can be applied:
Time to invest in your business
If you have a business and want to expand it, mortgaging your property can be a solution to raise funds. This is because this investment can bring more return, ie improve your financial life. It is also possible that you use your own profits to pay off the debt with the financial.
The same goes for those who want to undertake and start a business . In this case, it is important to study the market, plan the steps of opening the business and prepare before applying for the mortgage.
In house renovation
If a renovation of your property contributes to its appreciation, it may be a good option to mortgage your property. It may be more advantageous than buying material and paying labor with credit card interest, for example.
It can be especially suitable for costly renovations and repairs , such as changing wiring, installing swimming pools or even building another property on the same site. As in the previous case, it is important to plan to know how much you will need to request to complete the renovation.
In the settlement of expensive debts
Everyone has gone through the hassle of owing large sums and risking losing a car or other good. At this time, mortgaging the property can help you pay off your debt in installments and at lower interest rates.
You can apply for a loan to pay more than one debt and thus focus the payment on the single monthly mortgage installment of the property, without the abusive interest and the risk of paying twice what you owe.
The mortgage enables the applicant to get a significant and long-term repayable loan, which can be a breath during a seemingly unsolvable financial crisis.
The biggest advantage is that the mortgage charges lower interest on the installments, precisely because there is a property as collateral. Still, it is important to be sure to research the interest rates charged by the institutions that offer this service.
It is also important to analyze your financial situation and ability to pay to avoid being caught with high installments and seeing a snowball.
The ideal is to have the help of a serious company, consolidated in the market and with a high satisfaction rate. This prevents you from experiencing fraud or other issues that could compromise your assets and your family’s future.