It is worth noting that we distinguish two types of loan consolidation. One of them is the cash option. Today, however, we will deal with the mortgage variant.
What characterizes this solution? What are the most important pros and cons? If you want to know them, be sure to read today’s entry, which is devoted to this issue.
Why is it worth taking a mortgage consolidation loan?
It should be emphasized that the mortgage consolidation loan has a relatively low-interest rate. In this aspect, customers have much better financial conditions to choose from than, for example, a cash consolidation loan. No wonder that there is no shortage of people who willingly choose such a variant. Thanks to this, you can save a lot of cash and pay simply smaller installments. I think everyone is well aware of this fact.
Many people emphasize that a mortgage consolidation loan involves a very large amount of loan. In fact, it is limited only by the value of the property. You should also pay attention to the relatively long loan period. Nothing prevents you from taking this type of loan for several dozen years.
This, of course, means that the monthly installments are really low. There are a lot of people who do not want to take on heavy loads each month. On the other hand, they don’t mind that they will pay their debts over a long period.
Collateral in the form of real estate means that clients may even have average creditworthiness, and they will still get a loan. In addition, customers can choose a relatively large amount of additional cash for specific purposes to the amount being consolidated. All this makes this option popular in our country. However, this is not surprising.
Mortgage consolidation loan – the most important disadvantages
People who decide on such a solution must provide security in the form of real estate with a free mortgage in the selected bank. A third-party surety is also a common option. In such a situation, for example, a family member or trusted friend, etc., provide security in the form of his property. However, it can not be hidden that it is quite troublesome, and for some people – who do not have their own house or apartment – is an impossible condition.
The procedure for obtaining a mortgage consolidation loan is relatively confusing. Stakeholders must provide a large number of necessary documents, and the processing time is relatively long.