A mortgage loan is not necessarily tied, although most of the time it is used to buy or build a property. However, if you own an unencumbered property, you can borrow it and use the loan to finance other wishes, such as a vintage car.
When do you need a mortgage?
They are used when a particularly high loan amount is required, for example as start-up capital for self-employment. A mortgage is not required to finance a property.
What happens to the mortgage?
In the event of a divorce, the bank can choose from whom to collect the loan and interest. If the latter is willing to bear the entire mortgage alone, the bank still retains the liability of the ex-wife. Because two debtors are greater security for the bank.
Is a loan earmarked?
In short, a loan for free use is an installment loan without a purpose limitation. If you are planning to take out a loan, the bank often asks first about the purpose.
Are loans earmarked?
A purpose-limited loan is a loan that is taken out for a very specific purpose. A very classic example is the financing of a property. Customers go to the bank with the specific goal of financing a property and taking out a loan for it.
What does free use mean?
In short, a loan for free use is an installment loan without a purpose limitation. With this, she wants to find out whether there is any collateral for the loan. For example, in the case of a real estate loan, this can be the home or in the case of a car loan, the vehicle.
Why Are Real Estate Loans Earmarked?
Real estate financing is generally earmarked because it can only be used to buy a property, a new building or a building renovation. The borrower cannot freely dispose of the borrowed capital as with a normal installment loan.
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