Loan with the home as collateral and usually has a low interest rate
A top loan is an unsecured loan that is used in the purchase of property or condominium to cover the part of the loan that is not covered by the mortgage loan.
The mortgage loan is the loan with the home as collateral and usually has a low interest rate, as the lender has good collateral for the loan. Since the mortgage ceiling was introduced in 2010, loans can only be borrowed up to 85% of the value of the home.
The rest has to be paid in cash and therefore top loans no longer exist to a large extent.
Still able to get full funding
However, some banks offer financing of the loan up to 100%, but the mortgage itself may amount to a maximum of 85% of the value. Exceptions can in some cases be granted when converting from tenant to tenant-owner. For those who find it difficult to get a loan, Bluestep is among others.
Those who cannot afford the cash assistance sometimes take a private loan, which can be expensive compared to a regular home loan with collateral. Previously, the mortgage loan could be divided into a mortgage loan and a top loan, but the mortgage ceiling prevents this.
Convert expensive top loans
Still, unsecured loans, where the purpose is to buy a home, can be called top loans. If the housing has increased in value, you should try to solve expensive top mortgages by converting them into mortgages. Negotiate with the bank or consult with another bank if you can get better terms.
Since top loans disappeared, it has become more difficult for first-time buyers to enter the housing market, but the idea is that the mortgage ceiling would cool the market and protect the economy, which in the long run is good for everyone.
But the fact remains that the housing crisis means that many young people are still forced to take out unsecured loans to be able to enter the market as the loan promise covers a maximum of 85% of the value of the home.