Non Recourse Mortgage

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A non recourse mortgage is essentially a home mortgage that does not have the individual or business responsibility associated with it. This type of mortgage is becoming more accepted as individuals and companies are looking for means to finance their companies and homes. This loan does not encumber the individual or their corporations to individual and corporate responsibility.

The conventional non recourse mortgage is a secured, asset based loan or mortgage. Because they are collateralized mortgages, they are becoming more popular since they limit the liability for the individual or corporation. If one defaults on the mortgage, the only asset that can be lost is the given collateral. The conventional non recourse mortgage is essentially a securitized asset because the bank protects itself from default by seizing the property. Because of the built in protection, the loan usually affords more beneficial terms than a conventional mortgage. A corporation or individual can easily apply for a non recourse mortgage with an effective rate between 3%-6%. Generally, this rate of interest is two to four points lower than most conventional mortgages.

Because of the collateral associated with this loan, it’s simple to apply for and easily underwritten. Credit scores of individuals or bankruptcies from corporations rarely affect this loan from being approved. A specific individual or business could have the approval and necessary disbursement of monies within 4 to 5 days. It all depends on how rapidly the simple conditions are verified.

Consequently, because of its specific asset requirements, this type of mortgage does not have the financing problems that conventional bank mortgages are currently facing. As long as you have the assets, you will likely obtain the financing for your corporate or individual needs. Unlike conventional bank mortgages, which are hard to come by today, an asset based loan or asset based mortgage can be approved rather simply.

It is important to remember that applying for any type of mortgage is an individual choice. It is best that you learn as much as you can about how a non recourse mortgage works. Spending the time to obtain the necessary knowledge may save you thousands of dollars throughout the term of the mortgage.

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