Discover a possible solution: property refinancing
In-home refinancing, you get a loan while offering your home as collateral to the bank.
Have you thought about refinancing your property? This is the simplest approved type of loan on the market.
Loan applications grew considerably in Brazil during the pandemic, but many people did not get access to the requested credit.
This is even a reflection of the insecurity that banks and financial institutions feel regarding consumer payments. After all, the country is in crisis, and indebtedness tends to increase during these periods.
Home refinancing, however, is a type of safe credit for banks. So it can be an easier and more interesting option if you need money. See all about it below!
How does property refinancing work?
Home refinancing is a secured loan. So, to refinance, you need to own a property in your name.
From there, you can apply for a loan from the bank. “In exchange”, he will give away his house, his apartment, etc. as a guarantee for the payment of this loan.
It means that, if the credit installments are not paid, the bank can “take” your property to pay off the debt.
But rest assured: this is only done as a last resort. Banks are not really interested in taking your house. What these companies want is to get paid on the loan. Then they will try to negotiate with you before taking any major action.
Therefore, the ideal is to plan well to keep the loan payment on time. However, if that doesn’t happen, you and the bank can negotiate new terms and interest for a smoother payment.
It is worth noting that the property is given as collateral, but you can continue to use it normally. You will not be able to dispose of or sell the property, but you will be able to continue living in it, with no change being made by the loan.
When to opt for a property refinancing?
Property refinancing is an interesting option in many situations. For example, when the customer has a credit restriction.
Having a “dirty name” makes it difficult to get loans, isn’t it? After all, it is difficult to get the credit approved and, when this is done, the interest rates are usually high.
But in the case of property refinancing, you will offer the bank a guarantee of payment (the property). Therefore, your credit will be easily approved, even if you have some restrictions.
Another case where refinancing is worthwhile is when there is a need for a high amount. If you need to borrow more than R$30,000, you may find it difficult to obtain with an ordinary personal loan.
But refinancing is mainly aimed at large amounts. That way you can secure exactly the amount you need.
Also, secured loan guarantees freedom, so it can be a good option if you have multiple goals for money. Or, if you don’t want to “tell” the bank what you’re going to do.
It’s something different from what happens with a mortgage, for example – you can get a car loan or a mortgage. Therefore, they have specific, restricted objectives, a limitation that does not exist with refinancing.
Refinancing as an option for property exchange
A home refinance does not limit the use of money to a specific purpose. So, the property in your name actually refers to the asset you pledge to the bank. Not what you’re going to buy, as in property financing, where the money is released for the purchase of a house or an apartment.
But that doesn’t mean you can’t use home refinancing exactly to buy a home. Yes, you can, there is no limitation.
So, if you already own a property and want to buy another one, you can use this type of credit. You will not dispose of the first property: you will keep it, as a guarantee for the bank, and you will be able to buy the other property you want with the money.
It can be an option, for example, to buy a new house and move into it, or an opportunity to buy a new property and rent it out for extra income.
Where to hire and compare
When contracting a property refinancing, it is essential to compare the options available on the market.
Banks and finance companies have different offers and terms of credit. So, it could be that one of them offers a higher amount of credit, as you need. Or that the term and interest for payment of the loan are greater.
That way, making a good comparison will ensure you get the best deal possible. To analyze your options, you can use a home refinance simulator.
The Low-Interest simulator, for example, allows you to check and compare multiple offers at once. It will facilitate your process of choosing a secured loan.
Other credit options
If home refinancing doesn’t seem like the best option for you, there are other credit options available to choose from, such as a regular personal loan. Banks offer different amounts and terms for payment of this credit, which can help your financial planning.
There are also financing options. They are interesting when you have a specific purchase goal in mind. Then, you can take out a mortgage, vehicle loan or other.
If the credit you want is less, there are also credit card options. It is a facility for installment purchases.
Other examples are the syndicate and the payroll loan. In the latter, the credit installments will be discounted directly from your payroll.
Home refinancing can be a simple credit option to approve and very useful if you need high values.
So if you have a property in your name, look for a good refinance. It might be the best solution to get money right now.
If you don’t own a property, or if you want another type of credit, it’s also worth comparing your alternatives. For this, just use a credit simulator. Thus, it will be easier to find the most advantageous option for your pocket.