If you think you know everything about liquidity credit, because you have read a lot on the subject, better review these myths that exist about it so that you can make a better informed decision and do not take risks when applying for a loan of this type.
In this article we will mention some of the most popular myths about liquidity credit so that you have greater clarity if you are about to request it or if you are considering it among your range of possibilities.
Myth 1: I need a formal job to prove income and obtain a liquidity credit
Do not! It is not necessary that you have a formal job as a salaried employee, in order to have access to a liquidity credit, it is about having a verifiable and constant income input. There are financial institutions, such as ION, that offer flexibility in terms of income verification.
Therefore, it does not matter if you are an independent worker, in the same way, you can be a candidate to obtain this credit. There are different methods to measure the ability to pay, such as socioeconomic studies and work logs.
Discard this myth about liquidity credit from your mind and, if it is among your plans, start with the process of it to begin to see you benefited.
Myth 2: By leaving my property as collateral in a liquidity loan, I am losing it
False! Although the liquidity credit requires the mortgage guarantee, you have to know that the property that remains as backup remains yours throughout the term of the financing.
You will only lose it if there is delinquency, that is, if you are late in payments for a long time and you are not looking for a way to reach an agreement with the financial company to catch up.
Most entities offer multiple options in case there is a delay, so you will only lose the property if you do not wish, in any way, to reach an agreement with the creditor.
Myth 3: It will take me a long time to pay off the liquidity credit.
In reality, the time in which a liquidity credit can be paid depends on many factors, such as the financial institution, the amount of credit approved and the age, income and ability to pay of the interested party.
The terms range from 5 to 15 or 20 years, depending on each institution, but should be set by conducting a thorough analysis by both parties to avoid long-term problems and reach a good term of the liquidity credit.
Myth 4: Home equity liquidity credit gives me the full value of my property
This myth not only applies to liquidity credit, but to all home equity loans. People who request it often think that the finance company will grant them a loan for the full value of the home, but it is not.
Generally, between 50 and 70% of its value is granted, depending on the entity and the applicant’s credit history.
Myth 5: I only have to worry about doing the paperwork and the finance company will bear the costs
False! The financial entity will only serve as a guide during the process and will grant you the loan, in case you are a candidate for it, but the procedures that are carried out, such as the initial real estate appraisal and the notarial expenses are at your own expense.
The financier has no obligation to cover the payment of these procedures, since the beneficiary will be you and the financier will act only as facilitator.
Myth 6: If I lose my job, I will lose my property.
It is not like this. Liquidity loans, like any other home equity loan, come with a series of insurance, including unemployment insurance.
It is very important that when you are learning about liquidity credit, you ask about this insurance and some others that will help you face the different eventualities that may arise during the term of a loan.
Find out well about how they work and their conditions so that you are not surprised in case you suffer any inconvenience during the life of the credit.
Myth 7: I cannot advance payments of my liquidity credit because they penalize me
Although there are financial companies that have certain restrictions and penalties for advance payments of monthly payments or the liquidation of the credit, there are others that do not have these clauses.
In ION Financiera, for example, there is no penalty for advancing installments, so in case you want to advance contributions to pay off the credit faster, you can do so without any restrictions.
When looking for a liquidity loan, always pay attention to all the financial clauses, to avoid surprises in the future.
Myth 8: The interest rate is the most important thing when applying for a liquidity loan
The interest rate is only one of the aspects that you should look at when requesting a liquidity loan, but it is not the only or the most important. Mortgage loans are not only interest rates, but also entail notary fees, commissions, appraisals, among other expenses.
To calculate all of the above, there is the CAT (Total Annual Cost), which is what you really have to look at, in addition to the capital amortization. The CAT includes all the expenses that you will have to cover annually when receiving a liquidity credit or of any other kind.
There may be financials with a low rate, but nothing is amortized to capital, that is, the first months or years the payment you make is intended only for interest and commissions. It is better to choose liquidity credits that, although they have a higher rate, include more payments to principal.
Myth 9: Applying for a liquidity loan requires many requirements
This totally depends on the financial institution you choose to obtain the liquidity credit. Generally, banks tend to request more requirements and are more demanding in terms of compliance, but there are Sofomes, such as ION Financiera, that ask for requirements that are easier to meet.
Here the challenge is to find a finance company that adapts to what you need, according to your profile.
Myth 10: If I am in the credit bureau, I cannot access a liquidity credit
In reality, all the people who, at some point in their life, have applied for a loan or have processed some type of credit card are in the Credit Bureau.
What financial institutions evaluate before granting a liquidity loan or of any other kind is the credit behavior of the applicant, that is, whether or not it complies with the payment of the loans it has contracted, as well as its level of indebtedness.
Based on this, the credit score is obtained, which is a key indicator when requesting a liquidity loan, since it determines whether or not you have a good credit performance.
These are some of the most popular myths about liquidity credit. We invite you that before falling into any of them or others, you inform yourself with the financial companies that grant these loans so that you have greater clarity about it and do not get carried away by what people believe.
It is always better to be well informed before making any decision and especially when it comes to credits, since the consequences of not doing so can be high.
If you are thinking of applying for a liquidity loan, come to ION Financiera. We will solve all the doubts you have in this regard and we can help you carry out any plan you have in mind to specify through financing.