How do mortgages without collateral work?

Unsecured mortgages allow home buyers to access financing without the need for a third party to act as a guarantor. These mortgages are possible as long as the applicant demonstrates their financial solvency and meets certain requirements demanded by banking entities. Here we tell you how they work and what you need to obtain one.

What is a guarantee and when is it necessary?

A guarantor is an additional guarantee offered by a third party (guarantor) to respond to the mortgage holder in the event of non-payment. Although many mortgages do not require a guarantor, some entities may request one if they consider it necessary to increase the security of the loan.

Mortgage without collateral vs. mortgage with collateral

In a mortgage without collateral, the only collateral is the buyer and the property itself. However, a mortgage with collateral includes a guarantor, who agrees to assume the debt if the owner cannot pay it. Although it is believed that the collateral can improve the conditions of the mortgage, this is not always true.

What requirements must you meet to obtain a mortgage without collateral?

To obtain a mortgage without collateral, you must meet certain criteria:
• Age : The younger you are, the more likely you are to be asked for a guarantor.
• Job stability : Entities value job stability, regular income and seniority in the company.
• Savings : Having sufficient savings is a key point. It provides greater confidence to the entity.
• Financial situation : No previous debts or appearance in bad debt files (such as ASNEF or RAI).

Features and advantages of mortgages without guarantee

What happens if you don't meet the requirements?
If you do not meet the requirements, the financial institution may ask for a guarantor to guarantee the loan. The guarantor will be liable with his or her own assets in the event of non-payment, so it is a great responsibility for whoever assumes that role.

Is it possible to get better conditions with a guarantor?
Financial institutions take into account several aspects before granting a mortgage without collateral:
• Payment capacity : The monthly payment should not exceed 30-35% of monthly income.
• Job stability : A stable and well-paid job will be key to obtaining better conditions.
• Savings : Having sufficient savings to cover part of the operation reinforces the entity's confidence.

Conclusion: Is it possible to get a mortgage without a guarantor?
Yes, it is possible to obtain a mortgage without a guarantor as long as you meet the requirements established by the financial institution. If you have a stable financial situation, good savings and no previous debts, you can opt for this type of financing without having to involve a third party as a guarantor.