What is future value financing?

Future financing of values ​​includes projections on the future asset value and according to financing. Due to the wide range of factors that can enter the calculation of future values, many creditors have decided not to offer this type of funding. However, a limited number of creditors offers the future values ​​financing program for as high ticket items as real estate and higher end -end vehicles.

The most common application of future financing of value is related to the improvement of existing assets. If the house owner wishes to take a loan or a second mortgage to join the house or otherwise strengthen the property, the creditor evaluates the impact of these changes on the value of the land and buildings. This folder is sometimes referred to as determining the equivalent of value. The mortgage extension will be based on whether the creditor determines that the amount of the loan will lead to Rise is the value for the property that is at least comparable to the loan amount, includinginterest and fees. The actual process of performing this equivalent values ​​may vary from one creditor to another.

Many creditors see a large amount of space for errors when the future financing of future value is used as the basis for the loan. For example, there are many variables that can be used to determine the future value that is simply not present when expanding the loan based on current values. Since the process can be very complicated with future value financing, creditors may decide to finance the foundation of the current estimated value of the property, thus avoid investing time and resources in difficult projection.

One characteristic of future financing of values ​​that may or may not be attractive to the homeowner is the fact that creditors expanding this type of financing can have a certain amount of control on the outfitLata of funds. This will mean that the creditor will take steps to follow progress at work and ensure that everything happens correctly. For homeowners who do not have time or tendency to supervise work, the presence of the creditor can help ensure that the work is completed by professional and timely. However, if the house owner prefers closely involved in work, the presence of the creditor may be considered harassment.

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