Talking about the open mortgage is referring to a very particular product, which responds to specific needs when seeking financing to purchase a home.
It cannot be said that the open mortgage is worse or better than other types of schemes since its design is made to meet certain requirements. The important thing, in this case, is to know its characteristics so that, when the time comes, we decide with arguments and in a better way for an open mortgage or, where appropriate, closed.
But, do you know which ones have the characteristics of the open mortgage? Do you know what differentiates an open mortgage from a closed mortgage? In this text, we give you the most important details.
What is a mortgage?
To begin with, it is necessary to say that a mortgage, according to the Civil Code, is understood as “ a pledge right constituted on real estate that does not cease to remain in the power of the debtor ”.
In other words, the mortgage is defined as the instrument in which real estate remains as collateral against a payment obligation. With this, if the person who signs the mortgage does not comply with the agreed obligation, the creditor has the possibility of taking over the property to sell it and be able to collect the debt.
Although there are personal loans with mortgage guarantees, in which a person requests financing and their home remains as collateral, the mortgage loan is understood as the financing granted by an entity for the purchase of a house, whether new or used. It is in this framework that the term open mortgage comes into operation.
Characteristics of the open mortgage
With that said, we can get down to business.
Thus, an open mortgage is one in which the property involved in the operation responds as collateral for more than one credit obligation.
In this sense, when speaking of a loan for the purchase of housing, the property is not only a guarantee for the payment of the financing granted for the purchase of the property, but it is also defined as a possible pledge of obligations that the same debtor could contract with the banking institution at a later date.
In this way, the house that is acquired could be claimed to demand payment in case the creditor does not comply with new debts, such as consumer loans, including credit cards. And it is that it is established that with the open mortgage, the property remains as a guarantee of all the obligations, of any nature, together with all its accessories, which for any concept have been contracted or those involved will contract.
In Colombia, the open mortgage is of an indeterminate amount. In other words, when defined as a guarantee of future obligations, which are not yet known, a maximum value of the possible operations is not initially agreed upon. However, it should be noted that the criteria for new loans are set by the bank.
In this regard, for example, some institutions define in their contracts that the signing of an open mortgage does not represent an obligation for the bank to grant new financing or to grant extension possibilities on new credits.
Advantages and disadvantages of the open mortgage
As in any financial product, good management of this type of instrument can make them a great tool for people. However, poor management could lead to problems that impact the personal finances of Colombians.
For example, one of the advantages mentioned is that, by having an open guarantee, access to future financing could be more flexible. However, this element, if combined with poor management, could represent over-indebtedness.
The important thing in this type of case is to carry out effective planning. Remember that acquiring a mortgage is an obligation that will last for at least 20 years, during which time part of your income will be committed to paying the credit. If you have this aspect in mind, and you make your budget, having a sale of access to future financing is a good alternative.
