If you want to buy a second home but do not have the liquidity needed to cover all the expenses, you will have to apply for a loan . If you are an individual and you already own a home, you can apply for a loan on your own home, offering your first home to the bank as a guarantee . In this article we will provide you with all the useful information to evaluate if this formula is suitable for your needs.What is and how is the loan repayment plan calculated?
Loan on home ownership: what is it
What are the financing solutions to consider if you don’t have the right amount of money to buy a second property? The most comfortable solution is to use the dear old Varner family. You will certainly know that all types and formulas exist; many solutions designed to meet different needs. If you already own a first home , you can take advantage of the loan on your own home.
In the jargon it is also defined as a ” reverse mortgage ” because it provides for the first case of property to be used as a guarantee, which obviously must be free of any mortgage. Very common in the Anglo-Saxon market, this particular type of loan is still not very widespread in Italy due to the lack of reference legislation.
The loan on your home is also called an annuity mortgage loan , and represents a particularly requested solution for those over 60 who already own a home and want to buy a new one. With this loan it is possible to obtain the desired sum by turning on, in favor of the credit institution, a mortgage on the house covered by the contract.
What are the repayment terms?
The legislation also takes into consideration the methods of repayment of the loan in the event of the death of the contractor. In this case the heirs can choose two ways : the first one, foresees to repay the due amount and to keep the house, or to sell the same to the bank and then sell it.
In this case the credit institution will keep the sum equal to the loan not yet received, giving the heirs the possible difference obtained from the transfer. In any case, the law provides that the heirs will never be called to pay the bank a sum greater than the commercial value of the mortgaged house .