Excuse me, what's the difference between borrowing OD and adding mortgage?

When buying a property, if you take out a mortgage loan and borrow a sum of money (usually 70% of the property price) to pay for the purchase of the property, this mortgage loan can be called the first mortgage loan.

A few years later, the first home loan has been repaid in part and is urgently needed. If you want to borrow more money from the bank, you can apply for a second mortgage from the bank, which is called "additional mortgage". This mortgage is not used to pay for the purchase of real estate, but is generally used to meet the urgent needs of borrowers (for example, cash flow is urgently needed, or hospitalization and surgery are suddenly needed).

The amount of additional mortgage depends on how much principal the borrower has repaid at the time of the first mortgage and the current interest at the time of additional mortgage. On time, the loan amount is fixed and will be remitted to the borrower's account immediately. So the repayment is also fixed (but the repayment amount will change according to the interest rate, and if the interest rate changes little, the repayment amount is also fixed).

OD (bank account overdraft) is a standby letter of credit (no amount will be remitted to any account), that is, the bank grants a fixed overdraft limit (for example, 6,543,800 yuan), but it belongs to a standby letter of credit. If the applicant does not use any overdraft (that is, there is no overdraft), there is no need to pay interest, and this amount is not a cash remittance to the applicant's bank account, but a limit. Generally speaking, the overdraft limit is set on the basis of current account. For example, the bank's current account balance is only 100 yuan, but a check for 50 100 yuan is written to the supplier. When the supplier deposits the cheque into the banking system and clears it, since the overdraft limit of the account holder is 654.38+10,000 yuan, the cheque will be deducted from the account by 5065.438+000 yuan. Then, the balance of the current account is-50,000 yuan (that is, 50,000 yuan has been overdrawn), and the interest will be calculated according to the overdraft amount and overdraft days. Generally speaking, the overdraft interest rate will be higher than that in mortgage interest rates. Simply put, interest will only be charged if there is an overdraft. If there is no overdraft, but the bank has approved the overdraft limit, no interest will be charged.

Even if the property is in a private name, the bank will accept it if the holder is a director or shareholder. Depending on the circumstances, the bank will decide whether to give the company an overdraft limit (for example, the bank may accept the property as collateral and issue loans without any mortgage).

For the purpose of the company, cash flow is necessary for doing business, so everyone can apply to the bank for an overdraft limit as a reason (depending on whether the bank accepts real estate as collateral and the company's asset-liability ratio and cash flow).

2011-09-14 22:10: 22 supplement:

When the property market goes up, the bank's valuation will go up, and will the loan amount also go up?

No, because the mortgage or OD is determined on a certain day and will not increase with the rise of property prices.

But after a period of time (for example, two to five years), if the property price rises sharply, the borrower can apply to the bank for additional mortgage (that is, the third or fourth loan) or increase the standby overdraft limit of od. The bank will re-evaluate the borrower's finance and the mortgage balance of the building. Of course, banks have the absolute right not to approve any request to increase the bank overdraft limit.

If the application for increasing the overdraft limit is too frequent, the bank will not accept it.

2011-10-151:00: 31supplement:

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docs.google/spreadsheet/viewform? Form key = dfz5q1k5nffrd2tlmetnbvptvs1qnle6mq. The biggest difference between mortgage and OD is that the mortgage ceiling can only be 70% of the valuation at any time, while the OD limit can be loaned to more than 70% of the valuation. In terms of interest rate, the mortgage will be lower, and the interest on OD amount may be higher or lower, because more than 70% of the bank's loans are risky. The OD quantity is mainly reserved and needs to be reviewed every year. It can be increased or decreased, and there is an annual fee. However, if the OD amount is not used, there is no need to pay interest, which is suitable for business turnover customers. ,