Of all the possible formulas for accessing credit, the one with the most options for success is that of home equity credit.
However, this does not mean that all banks will receive you with open arms because you can offer such a guarantee. In fact, a damaged credit history can be definitive for the financing possibilities to be closed in the traditional banking circuit.
Fortunately, apart from the banks, there are other entities that are willing to take greater risks, such as Good Lender, which offer intermediation to obtain mortgage- backed loans.
Let’s see what are the possibilities that Good Lender offers and its conditions to access loans.
How much money can you get with a Good Lender loan
The minimum amount that can be requested as the loan amount is $ 5,000, while the maximum is set at $ 500,000.
In any case, there are established a series of parameters in relation to the house that must be taken into account to get an idea of the amount that can be obtained and whether there are real possibilities or not of granting said loan.
The first of them is the value of the loads that the house has that is offered as a guarantee.
Since almost everyone buys a home through a mortgage, the remaining amount payable from it cannot be more than 40% of the property’s value.
In other words, if you have asked for a 20-year mortgage and have been paying the apartment for only 3 or 4, it is practically impossible for you to offer it as a guarantee.
On the other hand, the maximum amount that can be granted in relation to the appraisal value is 50%.
It is with these factors that the calculations are made and both the viability of the loan and the maximum amount that can be requested are determined.
Who can apply for a loan to Good Lender
There is no record that you have to have any special situation to be able to apply for a credit, beyond the age of majority necessary for any of these operations and the aforementioned condition of owning a home that meets the requirements that have been explained.
However, a series of acceptable assumptions are established for the granting of credits:
- If the money is needed for the acceptance of an inheritance
- If the money is needed to perform a debt reunification
- If the money is needed to start a business or expand one already underway
- If the money is needed to reform a property and increase its value
There is no mention of having to enjoy a stable employment situation or any other type of limitation.
In fact, the most common limitation is usually the inclusion of the applicant in a delinquency list such as Financial Credit Institutions, but in this case it is not.
The condition of appearing in a list of these characteristics is not a problem, since it is understood that the risk is sufficiently covered by the mortgage guarantee offered by the applicant.
Loan conditions and associated costs
The loans are granted at a fixed interest, which will be established in a range between 2% and 18%. Therefore, it is not possible to inform a priori what the interest rate will be, beyond the information that appears in the conditions brochure and that establishes the following formula:
TIN min / max. + 2% / 18%
The aforementioned brochure also mentions the interest in the form of APR or the cost of the loan on an annual basis, which is said to reach a maximum of 19.9%.
Although there is no opening commission, other costs associated with the operation must be accounted for, such as the appraisal of the property, the study commission by Good Finance, – which can reach up to 10% of the total granted – and the costs of Lawyer and notary.
And in the event that once the loan is granted, the client decides to pay it off by amortizing the remainder in advance, 0.5% of the amount will also be charged if this fact occurs during the first 5 years or 0.25% if this circumstance occurs after that period.
How to request it
Like so many other online loan services, the application for the credit is made through the website itself.
The process is quick and it places special emphasis on receiving information about the property that is owned, since this information is crucial to establish the viability or not of the credit.
After answering a few questions, the process is started by Good Finance and within a period of no more than 24 hours a representative of the company gets in touch to get more information and offer advice about the loan.
In this sense, it should be noted that, far from offering a standardized formula, this contact serves to design the loan proposal that best suits the client’s interests.
The entire negotiation process is carried out transparently, and the applicant can choose both the appraiser and the notary where he wants the paperwork to be carried out.
The loan must be repaid within a period to be set between a minimum of 6 months and a maximum of 20 years. Now, there are several possibilities when choosing how you want to pay the loan granted:
- Payment of interest and amortization of principal at maturity.
- Payment of interest periodically and amortization of principal at maturity.
- Payment of periodic installments that include capital and interest and amortization of the part of the remaining capital at maturity.
- Payment of periodic installments that include principal and interest.
- Lack of the first five years and to continue from that moment on paying regular installments that include principal and interest.
In the case of opting for a system that includes fees, these will be monthly.
This offers the great advantage that the client does not have to yield to a strict payment system, but can choose the one that best suits their personal situation.
Not surprisingly, similar mortgage conditions apply to a home equity loan like this when it comes to defaults. This means that in the event that the quotas are not paid in due time and form, the loss of ownership of the home may occur.
In addition, the concessionaire of the loan will have the right to claim the payment of the amount owed with all the present and future assets of the client.
Good Lender is an especially useful option for people whose history in bad debt lists prevent them from accessing loans easily, especially if they are large.
In these situations, the participation of an intermediary company can be useful, and although there are negative aspects such as the numerous costs associated with the loan, the positive ones, such as flexibility in the payment formulas, must not be neglected either.
When analyzing the assumptions for which Good Lender manages loans, it is easy to see that these are situations designed to generate value: a reform, the expansion of a business or a reunification of debts are situations that generate an economic benefit, either in way of increasing the value of a property, more commercial possibilities or less expenses each month.
Therefore, the costs of this loan can be offset by the benefits offered by the use that will be made of the money, and can be considered in some way, as an investment, since we are talking about people who, in most cases, they would not have the opportunity to access this financing due to their particular situation.