Loan with financed property guarantee
In the ideal world, a lender will require each of the principals and affiliates behind the borrower to sign an unlimited, unrestricted guaranty of payment (often referred to as a full-recourse guaranty) for every payment that would have been required under the borrower’s original loan document. The goal is to incentivize borrowers and guarantors to follow the rules, thus reducing the risk for the lender.
However, empréstimo com garantia de imóvel financiado approach doesn’t always work and sometimes there are reasons why a lender cannot accept an unlimited guaranty of payments. Some of the most common reasons include the following:
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When this happens, lenders may look for alternatives to a full recourse guaranty to mitigate their risks. One option is to limit the personal guarantee to a set dollar amount. This can be useful for situations like when the borrower(s) already own two financed investment properties and are personally obligated on their mortgages, or to help support new development projects with significant lease-up components where the personal guarantee starts high but will decline over time.
Another alternative is to pledge additional collateral. Often borrowers have additional property, cash, account balances or marketable securities that they can pledge in lieu of a guarantee.