Obtaining a home loan is often associated with a guarantee by a mortgage or by guarantee, a requirement of the banks making it possible to recover the sums in the event of non-repayment. But can you actually get a home loan without taking out one of these guarantees? Response elements.
Home loan and guarantee: how does it work?
When a borrower turns to a bank to obtain a mortgage, he will have to file a financing request by importing details on the nature of his project (purchase, investment, construction, renovation, etc.) and on his personal financial situation. These elements will allow the bank to assess the creditworthiness of the borrower and especially to be able to grant or not finance. This assessment will help define the quality of the borrower’s file and be able to offer him more or less advantageous repayment terms.
To avoid the risk of non-repayment of the debt, the bank will offer the borrower a guarantee. This guarantee can take the form of a mortgage on the property to be purchased or it can take the form of a deposit. It is, in fact, a surety company that acts as a guarantor in place of the borrower. The surety company will, therefore, study the mortgage loan file and accept or not the guarantee request. When funding is secured, the bank often follows the advice of the surety company and makes the loan.
Unsecured home loan: myth or reality?
An unsecured home loan is simply referred to as a loan that is not guaranteed by a mortgage or bank guarantee. It is indeed possible to obtain a home loan of an amount greater than $ 75,000 without being forced to call on a surety company or to put in place a mortgage guarantee. These conditions are particularly restrictive because only the best profiles will be able to benefit from a mortgage loan without guarantee. The guarantee will be replaced by a pledge, it is quite simply the establishment of a guarantee which will be based on personal savings. The bank will simply block the savings and grant between 50% and 100% of the amount of these savings in mortgage loans.
It is, therefore, necessary to have a significant amount of savings that can allow borrowing an amount at least equivalent from banks as part of a home loan. Also called a Lombard loan, this financing is more difficult to set up because not all banks offer this solution. However, it has the merit of existing and a profile that meets the requirements of the collateral can apply for a mortgage without collateral.
Simulate an unsecured home loan
It is quite possible to simulate a mortgage loan operation without resorting to a guarantee, this simply allows you to check the amount that it is possible to obtain from banks but also to be aware of the loan conditions offered by the various financial institutions. Note that this simulation is completely free and without any commitment for the borrower. The bank will be able to inform the latter of the conditions of access to the mortgage without guarantee but also to inform him of the specificities and the criteria required.