Buying a home or any other piece of real estate is a huge investment for a family or an investor on Long Island. In fact, all but the very wealthiest New York state residents will need to take out some sort of loan to acquire even a modest property. As a result, the vast majority of people will have to take out a mortgage from a bank in order to complete the purchase of a property.
Mortgages are big financial risks both for the borrowers and the financial institutions who provide the funds. For a borrower, they have to make sure that they pay faithfully every time an installment on the loan is due. Otherwise, they may not only lose their property and also face the possibility of getting sued, garnished and the like.
One options that borrowers have for cutting down on this risk is what is called a non-recourse loan. As an overview, a non-recourse loan, as the name implies, gives the financial institution no recourse, beyond simply taking back the property, should the borrower not be able to make payments.
The advantage to a non-recourse loan for a borrower is that they have a little peace of mind and may feel comfortable taking a risk on a new business if they know all they can lose is the property. A bank on the other hand is able to charge more for these types of loans since they involve additional risk to the bank.
Getting one of these loans may involve some legwork and even some negotiation with the bank. An experienced legal professional with real estate knowledge may be helpful in this respect.