Many people confuse a caveat loan with a second mortgage, but this type of loan is not the same as a refinancing. If you need access to funds fast and you cannot wait for a traditional bank to approve your application, why not get in touch with alternative lenders and get information about a caveat loan? Before you opt for one, you must understand the key features.
Not Necessarily a Second Mortgage
Many people think that caveat loans are a second mortgage. They think this way because you can use your property as security to access the benefits of a caveat loan. In reality, it isn’t a type of second mortgage at all, but simply a loan that can be used for many things. This type of loan allows a person to secure funding against the equity in your property.
When you are granted a caveat loan, you can no longer sell that property. The property is now being used as security for the lender. It actually stops the borrower getting into further debt as you cannot get other loans using that property as security.
Caveat is Lifted After You’ve Repaid the Loan
The minute you make your last payment, the caveat is lifted on the property. This means it is no longer attached to your property and it can be used as equity against another loan if you need it. Some people feel worried about a caveat loan, but there is nothing to worry about as it is removed once you clear the balance of the loan.
One of the main reasons why so many people go for a caveat loan is because of the approval time. You can apply online within minutes and have the loan approved within 48 hours. Once you are approved, the money will be immediately transferred to your account. This makes a caveat loan a great option for all kinds of business people.
Because you are using a property as security, you don’t have to supply mountains of paperwork to secure a caveat loan. This makes borrowers more comfortable and it speeds up the process.
As you can see, there are many advantages to applying for a caveat loan. It is a much easier way to secure funds than using a traditional lender. When you use a property as security, the lender is much more relaxed and confident when providing you with funds. Before applying, it is crucial to fully understand this type of loan.