The family that has to carry out more or less complex jobs at the home of his property, can choose between two different ways to obtain the liquidity necessary to cover the expenses that must be faced.
The first, which we can define as more traditional, is that of home mortgage restructuring.
The second is that of the home loan
Each of these two credit solutions has specific characteristics and it would therefore be conceptually incorrect to consider the home loan simply a synonym of the home loan.
Despite the fact that both products are aimed at carrying out renovations in the home, the financial rules and the legal implications of the two credit solutions are completely different. The strength of the home loan, in fact, is represented by the absence of mortgage guarantees.
Unlike mutual restructuring, which follows all the rules of the traditional mortgage, the home loan has no mortgage implications, which means that in order to subscribe to this loan, the bank or finance company to which the client turns, will never ask the constitution of a mortgage on the same building or on a guarantee property. From this point of view, therefore, the home loan is much lighter than the traditional mutual restructuring.
The absence of mortgage guarantees, on the other hand, has made home loans the ideal solution for those singles or those young families who do not have properties to mortgage or, worse still, do not even have a permanent employment contract. With regards to income guarantees, the home loan has other obvious advantages compared to the mortgage. Indeed, it can easily be asked also by a precarious young person, as long as a second signature (generally by a relative) is attached to guarantee the loan, which will respond in case of default by the first signatory. Well this is an objective advantage because for the Italian banking law, loans can be granted only and exclusively to subjects who are holders of a permanent contract or, under certain conditions, to self-employed workers.
From this point of view, the home loan is much more similar to any personal loan “finalized” rather than a mortgage, despite the fact that the object of the loan itself is a property.
The same procedure for granting the home loan closely resembles simple personal loans, without particular differences except for the specific purpose.
How do you get a home loan?
To obtain a home loan it is necessary to present a specific request to a bank or a financial company that deals with this type of product. The documentation required to prepare the loan is very limited. In fact, the bank will have to present its personal documents (identity card and fiscal code) and the documents on its own income, ie payroll (in the event that the applicant is an employee) or the single model (in the event that the applicant is instead an employee).
If there are no problems of a financial nature (such as, for example, reports in central banks risks for repayment of previous loans of any kind) and if the customer has a contract sufficient to cover the repayment period, the loan can be granted very quietly while, otherwise, a second guarantee signature will be required.
Since this is a finalized loan, it provides for the presentation of what in banking jargon is called “justification”, ie a document that certifies that the sum covered by the loan will be used precisely for that specific purpose, or the execution of the works of restructuring.
A classic example of proof of home loans could be the company budget that will then carry out the work.
As can be understood from the speech we have made so far, home loans have many more advantages than traditional mortgages. Yet the latter continue to be preferred to simple home loans because they can boast a decidedly lower rate as well as the possibility of obtaining a much longer repayment period.