One of the characteristics of today's society is that most people bet on immediacy to achieve certain objectives in different areas of daily life. Therefore, the idea of obtaining a mortgage with little paperwork and in the shortest time possible, sounds like the ideal business for many people.
Urgent or express mortgages paint that scenario, however, some market specialists warn that the offers of these products often create confusion and false expectations among users.
Unlike conventional loans, these are not granted by banks, but by private companies or by individuals. In an article recently published in the Idealista portal, the journalist Ana Alarcos, specialized in economics, clarifies that the first thing that must be keeped in mind is that this type of loans do not serve to acquire a home, but can only be requested by those who already own of a property paid in full or with a minimum charge, because the house will be the money guarantee for the creditor.
Alarcos also explains that express mortgages usually have low amounts, since they almost never exceed 40% of the price of the home and its objective is to provide liquidity and address specific economic difficulties, such as paying for the repair of a vehicle or canceling any debt. In general, this product is usually an alternative for those people who first tried to get a loan in a bank, but they were denied.
The main attraction of these mortgages is how quickly they can be approved, since the money is obtained in a few days and do not ask for many documents or requirements. In fact, some sites on the Internet ensure that for this process is completed it is indifferent if the applicant has arrears, charges or figures in a record of defaulters. However, before deciding to take that way it is important to also study the risks.
Juan Villén, director of Idealista Hipotecas, warns in the same article cited above, that "these practices are totally contrary to the European guidelines for responsible credit that require, among other things, analyzing the customer's ability to pay." He adds that the amount that is lent is usually reduced and that the user "ends up with the risk of loosing his house for an amount much lower than his property".
The expert also warns that one of the great risks of this type of product is that it commits the only asset that you have, since the house acts as a guarantee. "You can not forget that if there is a default will proceed to the execution of the house and, if necessary, to the auction of it," he says.
Another aspect that is important to keep in mind is that this type of loans conceals a much higher than expected Annual Equivalent Rate (APR). The director of Idealista Mortgage emphasizes that one of the tricks or hooks of express mortgages is that it does not have very high interest, but hides commissions of all kinds. "For example, the loan is 50,000 euros, but they actually pay you 40,000 euros, so that the real APR is 20% or higher," he explains.
We present some recommendations if you are thinking about acquiring this product:
Before applying for an urgent mortgage, it depletes all family and banking channels for a loan.
Ask for advice to someone who knows the world of finance and make sure that the lender complies with Law 2/2009 on credit intermediaries and that it is registered in the State Registry of intermediation and mortgage loan companies, for this, consult the National Consumption Institute, which is the agency in charge of managing the registry.
Also read carefully the contract to know what you are signing, in this sense, it is important that the lender makes us a binding offer that includes all the conditions such as the interest rate.
And, finally, request in advance the notarial deed to be signed to ensure that there are no abusive clauses and carefully study the conditions of entities located abroad to avoid frauds.