Table of Contents
- 0.1 Liquidity mortgage: what it is and how it works
- 0.2 What is the liquidity loan and what is it for?
- 0.3 How the liquidity loan works
- 0.4 How to obtain it: the necessary requirements for the mortgage plus liquidity
- 0.5 Simulation of a liquidity mortgage
- 0.6 The possible alternatives
- 0.7 When is a liquidity loan convenient? Pros and cons
- 0.8 Liquidity mortgage: do all banks do it?
- 1 **Based on the information provided in the article, what key factors should individuals prioritize when evaluating whether a liquidity mortgage aligns with their personal financial situation and goals?**
Starting from the house up to the car, there are many expenses that each person has to bear and which inevitably end up weighing on the family budget. Precisely in order to meet these costs many people may decide to contact a credit institution to ask for a loan.
In this way it is possible to obtain immediate liquidity, thanks to which you can pay for the various goods and services of your interest. A particularly useful example of financing is the so-called liquidity mortgagewhich turns out to be a valid alternative to the most famous loan measures, such as salary-backed loans or personal loans. But how does the liquidity loan work, what is it for and above all how to obtain it? Let’s go into the details and see everything there is to know about it.
Liquidity mortgage: what it is and how it works
What is the liquidity loan and what is it for?
Il liquidity loan it presents itself as a particular form of financing that allows you to borrow even a particularly high sum of money, without necessarily having to declare a specific purpose as instead happens in the case in which a request is made finalized loan. The beneficiary, therefore, can use the money obtained in the way he deems most appropriate. For example, it is possible to use the money from the liquidity mortgage to finance a personal project, rather than buying a car, helping children or dealing with unexpected expenses.
But not only that, it is also possible to use this money to pay for holidays, home renovations or to cover the costs of an important event, such as a wedding. It is, therefore, one form of loan guaranteed by your propertythanks to which it is possible to obtain high amounts to satisfy the most disparate needs. This particular form of mortgage is used if you need a sum of money exceeding 30 thousand euros.
How the liquidity loan works
The liquidity loan is a form of financing designed for those who need a loan of a particularly large amount. To access this financing, the applicants must be 100% owners of a property on which there is no mortgage. This is because your property will be mortgaged and will represent a guarantee for the bank that decides to grant the liquidity loan. The operation of the latter is similar to that of a traditional home loan. The bank, in fact, evaluates the creditworthiness of the applicant, while the appraisers evaluate the property.
Following appropriate assessments, a sum considered sustainable and with a percentage generally equal to 70/80% of the value of the property. As regards repayment, it generally occurs through the payment of monthly installments, which are made up of a principal amount and an interest amount. The latter can be fixed or variable. But not only that, the bank almost always asks you to pay for an explosion and fire insurance policy as a form of insurance. Once the repayment plan is completed, the house is released from the mortgage.
How to obtain it: the necessary requirements for the mortgage plus liquidity
To obtain a liquidity mortgage, certain requirements must be met. First, you have to be owners of a property. This is because the bank, to grant the liquidity loan, will register a mortgage on the property itself. It follows that in the event that the property was purchased through a mortgage that has not yet been repaid. the lender may decide not to grant this loan since the house is already encumbered by mortgage.
Furthermore, just as with traditional mortgages, it is necessary for the applicant to demonstrate that they have a solid income situation, such as to be able to guarantee the repayment of the instalments. In particular, the institute considers that the mortgage payment must not exceed 1/3 of the salary. In this way the customer has the opportunity to calmly deal with any unexpected expenses, without risking not being able to pay the mortgage instalment.
Furthermore, the requesting party must be of age and not be more than 75 or 80 years old at the time of expiry of the repayment plan of the liquidity loan. But not only that, he must not have any executive or bankruptcy proceedings against him, nor at least have been reported as a bad payer to the CRIF, or to the Financial Intermediation Risk Centre.
Simulation of a liquidity mortgage
Like the home loan, the liquidity loan also involves the payment of a whole series of expenses such as the appraisal, the investigation, the insurance policy and the notarial deed. L’preliminary investigation, for example, is aimed at covering the costs for the services provided by the bank, including the stages of evaluating the request, prior to the actual granting of the loan. The relevant amount is calculated in proportion to the sum disbursed and differs from one credit institution to another.
Typically the relative percentage varies between 0.2% and 0.3% of the mortgage amount. Don’t forget the 0.25% substitute tax. As an example we report the simulation of a possible liquidity loan.
- Property value: 100 thousand euros
- Amount requested: 40 thousand euros
- TAN: 6.27%, fixed rate
- APR: 6.97%
- Duration of the repayment plan: 20 years
- Monthly installment: 292.88 euros
- Number of installments: 240
- Investigation costs: 1,000 euros
- Appraisal costs: 390 euros
- Substitute tax: 100 euros
In a situation of this kind, the beneficiary would have to pay a total of 71,782.26 euros. Of these, 40 thousand euros represent the capital portion, while 31,782.26 euros represent the interest portion. The cost of the service may also be added to these items fire theft policy which the bank could request as a further form of guarantee.
This, it is worth remembering, is just one example. It is not certain that all banks apply the conditions illustrated above for a request of 40 thousand euros. Before taking out a liquidity mortgage it is advisable to ask for the quotes to various banks to find out the actual conditions and expenses to be incurred. Only in this way is it possible to opt for the most economically advantageous solution.
The possible alternatives
Furthermore, focusing on mortgages, a valid alternative is represented by unsecured mortgage. This is a type of mortgage that does not include a real estate mortgage. Rather, it allows you to obtain money, to spend as you see fit, in exchange for other forms of guarantee, such as for example the surety of a guarantor. Since it is a riskier form of financing, the unsecured loan generally has higher interest rates than a mortgage loan.
When is a liquidity loan convenient? Pros and cons
If we are wondering whether to access this or not type of loanwe will have to evaluate what the pros and cons of this operation are.
I Pro
Certainly, by taking out a liquidity mortgage, we will be able to obtain a greater amount than a traditional personal loan.
We will be exempt from declaring its use and purpose, obtaining an advantage also compared to a finalized loan (e.g. loan for the renovation of a property), where the amount granted always has a very specific destination.
Among the benefits it is also worth mentioning the interest rates which will certainly be lower than a classic loan; The duration of the repayment plan may also prove advantageous, as it will be adequately extended and will give the debtor the opportunity to dilute the cost of the loan and mitigate the burden of the monthly installments.
The Cons
On the other hand, if we said that the personal loan usually has significantly higher interest rates, the same cannot be said of the initial costs. In the liquidity loan they are really substantial while in loans of this type they are very limited and sometimes amortized in the same installment plan.
A further aspect that should never be underestimated is that the first degree mortgage registered on the property makes it immediately attackable by the creditor when one is no longer in a position to honor the payment of the installments.
Finally the times. The preliminary process for the liquidity loan is very rigorous. The obtaining times are comparable to those of any mortgage (even up to 1 month) and therefore longer than the few days needed to access a personal loan.
In summary, if you are not in too much of a hurry get hold of liquidity request and if the amount you need is more than thirty or forty thousand euros, the liquidity loan represents an opportunity and an advantageous alternative compared to other forms of financing. Conversely, if the amount to be requested as a loan is a limited sum and the time you are willing to wait is very limited, it is a good idea to evaluate other types of access to the loan.
Liquidity mortgage: do all banks do it?
Banks are not obliged to grant a liquidity loan, for this reason it should not be assumed that all credit institutions make this form of financing available. Furthermore, even if an institution offers this type of financing, it should not be taken for granted that one is entitled to the relevant disbursement.
Each bank, in fact, can set different limits from another. Generally, they do not grant a mortgage for an amount exceeding 70% of the value of the property. Speaking of amounts, banks usually do not grant a liquidity loan below 30 thousand euros. Although it is a little-known form of financing, Most banks grant liquidity loans. Among these, for example, are included Bnl, Ing, Fineco, Unicredit, Chebanca and Intesa SanPaolo.
**Based on the information provided in the article, what key factors should individuals prioritize when evaluating whether a liquidity mortgage aligns with their personal financial situation and goals?**
This article provides a good overview of liquidity mortgages, covering both the benefits and risks. Here are some open-ended interview questions based on the article, divided into thematic sections:
**Section 1: Introduction and Definition**
* Can you explain in your own words what a liquidity mortgage is and how it differs from a traditional mortgage?
* What are some common scenarios where someone might consider a liquidity mortgage instead of other financing options?
**Section 2: Pros and Cons**
* The article mentions advantages like higher loan amounts and lower interest rates. Are there any other potential benefits of a liquidity mortgage that individuals should consider?
* The article also highlights potential drawbacks like high initial costs and the risk of foreclosure. What are some other potential downsides or risks that borrowers should be aware of before taking out a liquidity mortgage?
**Section 3: Accessibility and Banking Practices**
* The article states that not all banks offer liquidity mortgages. What factors might influence a bank’s decision to offer this type of loan?
* How much should someone realistically expect to be able to borrow through a liquidity mortgage?
**Section 4: Making an Informed Decision**
* Given the complexity of liquidity mortgages, how can borrowers ensure they are making a well-informed decision?
* What advice would you give to someone who is considering a liquidity mortgage but is unsure if it’s the right choice for them?
* What are some alternative financing options that someone might explore before considering a liquidity mortgage?
**Section 5: Future of Liquidity Mortgages**
* Do you anticipate that liquidity mortgages will become more or less common in the future? Why or why not?
* How might regulations, interest rates, or other economic factors impact the availability and affordability of liquidity mortgages?
These open-ended questions can help spark a thorough and insightful conversation about the complexities and potential implications of liquidity mortgages. Remember to be mindful of ethical considerations and encourage responsible borrowing practices during the discussion.
