In times of economic instability, you need to find alternatives to pay off debts. One of them is the possibility of taking out loans by putting your own home, already taken away as collateral, the famous mortgage or real estate refinancing. As things do not always happen according to plans, there is a risk that the homeowner may lose his job, for example, and need to renegotiate his or her debt.
Refinancing the mortgage of your home without scares
One of the simplest ways to pay less on each monthly installment and refinance the home mortgage is to increase the term of the financing. As the number of installments increases, the more likely the monthly amount to be lower. This may leave the value of the property a little higher, but it is a short-term exit.
Lower interest rates to refinance mortgage
Another option is to try to lower interest rates. Caixa Econômica Federal, the most popular Brazilian bank for residential real estate financing, establishes, under certain conditions, policies to reduce rates on financing, allowing old contracts, which were entered into before interest rate reduction announcements, to be reviewed.
Bad Debt Can Ruin Mortgage Financing
In both situations, the ideal is to pay always in day, either in more installment, or with lower rates of interest. The bank usually analyzes the mortgage situation of your home to check for default, open or late payments. If this analysis gives confidence to the banking institution, it can facilitate the refinancing of the mortgage of your home. Keeping what was hired is always the right one for times of difficulty.
Generally, refinancing banks charge lower interest rates than personal loan or overdraft fees, for example, that do not have a good as collateral.
In addition, you need to know your spending well and the money left over per month, as well as knowing in which situations it is worth going after refinancing.
By Caixa Econômica Federal, it is recommended that the client make a simulation of refinancing the mortgage of the house by the bank’s website, to get an idea of the values of the refinancing. After that, the client must go to an agency of the Box with the necessary documentation, personnel and the property.
Once you apply for the service, you go through the credit analysis and the bank is aware of the maximum amount you can clear for the loan. It is at this moment that the client establishes how much he will request and receives the money in the account of the same bank in a few days.
Find out what documents are needed to refinance the house
To request a loan with the home as collateral, the client must bring the following documentation: identity document, CPF, proof of status, proof of residence, proof of income and registration of the property. It is also important to know with the financial institution what is necessary to prove income, whether by payroll or bank statement, depending on the professional occupation of the person.
Mortgaging the home can be dangerous if there is a default.
When should I mortgage the house?
Before you put your home as collateral for a loan, you need to think about it. As already mentioned, this can be a life-saving solution, but it can also be dangerous if there is no planning and control. Keep in mind a focus, a concrete goal is key to doing this business without many risks.
A good reason or time to mortgage the property is to expand your business or invest in some high probability profit enterprise as a means of hosting, for example. In these cases, you just want to increase your income and you are guaranteed that you will receive a return on this investment without running the risk of losing your home in the future.
Mortgage is also a good option for those who want to renovate the house. That way, you value the property, but you pay for a loan that has longer terms (up to 30 years) and better rates than credit card, overdraft or personal loan interest.
In cases of more expensive debt, such as credit card bills, or a sudden hospital bill from someone who fell ill, for example, it’s also a good time to mortgage the house. Remembering that it is not enough to have the property to give as collateral. The bank does a credit analysis and checks if you are able to pay the mortgage installments and if it has the dirty name. The negotiation begins there.
What are the benefits of mortgage?
The main advantage of mortgaging is to get a tall, long-term loan to pay off the financing. With a guarantee house, the bank usually charges lower interest on each installment. Still, it is important to research different institutions that offer the loan and know details about refinancing the mortgage.
Understand the risks of mortgaging the home
As we always speak in our tips on the site, having financial control is key. In the case of home mortgage, if you can not afford the installments of the financing provided by the bank, even after initial approval to grant the money under the home’s guarantee, you may lose the good. For this to happen, banks usually record up to four installments in arrears, but even so, you have to be very careful.