There are more and more different types of loans available in the market. The senior loan is just one of these loans. A senior loan is aimed at people who are just a little older and have a villa or similar as fixed capital. The senior loan is a very interesting form of loan that can suit a fairly large number of people. Here you will take a closer look at how it works.
Who can take a senior loan?
There are a number of different conditions for applying for a senior loan, some of which are;
- Senior – This is a basic requirement that applies to access a senior loan.
- Age – It is also required that the borrower has reached a certain age in addition to being a pensioner. This age may vary slightly but normally the borrower is at least 55-58 years old.
- Access – Since it is on a villa, condominium, leisure property or the like to be mortgaged, it is obvious that you own one. This must also not be highly leveraged since before.
A senior loan is paid out every month or in a lump sum.
If you choose to have payments every month, it becomes a loan with a variable interest rate. If you want a lump sum instead, there is also the opportunity to choose a fixed interest rate over and above the variable. The interest on the loan is deductible and the lenders usually lend up to 60 per cent of the house’s market value
During the loan period, there is no requirement for repayments, but the interest is continuously charged to the total debt. This entire amount should then be paid at the end of the loan period. This means that the house may have to be sold to pay off the loan when the loan period is over. Something that hopefully does not do anything because at the loan period you are not going to stay in the house.