We continue the series of articles on the Viva Network project. And today we will talk about the existing problems in the field of mortgage lending, and what solutions our developers Viva Network.
In the first article it was said that Viva Network is a decentralized platform that uses blocking technologies, smart contracts and Viva Tokens tokens, which unites real estate buyers who want to get a home or other real estate for mortgages and private investors who are willing to finance this loan.
Thus, a platform will be created that will become the basis for decentralized financing of mortgage loans. Thanks to Viva Network, any user will be able to receive funds to buy their own housing on credit, while others will earn by providing these funds.
When we talk about blocking technologies and projects that use it to solve certain tasks, we often hear about how intellectual contracts can eliminate intermediaries in the processes of interaction between different parties. The Viva Network platform is no exception.
Various intermediaries, such as banks or other financial institutions, in the process of any lending, including mortgages, are becoming a big problem for many borrowers who want to buy housing on credit.
Any intermediary entails additional fees, which are reflected in the interest rate. In this regard, many of the borrowers can not afford to buy housing on credit, because later they will have to pay high interest. Another, no less important problem is the difference in interest rates in different banks, especially in different countries.
So, for example, to borrow housing on credit in Bermuda, a client must pay a loan with an interest rate of 6% - 20 years. And if the same client wants to buy real estate at the same price in the UK, the British bank will require only 2%. By the way, it was with this situation that one of the Viva Network team members collided. This was the basis for the idea of creating a platform.
The mortgage market is one of the largest in the world, and has about 31 trillion dollars. But most of the participants in this market are not in the best credit terms. That's why the creators of Viva Network and offer their solutions to current problems in this area.
With the help of smart contracts, the Viva Network platform provides direct interaction between borrowers and creditors, thereby excluding the participation of third parties in the process of mortgage lending, therefore, reducing interest rates.
On the platform, interest rates and all other loan terms are discussed by the parties in advance, when the buyer publishes information about the collection of funds for financing a mortgage loan. In this regard, all parties are in the most favorable position.
At the same time, buyers of real estate and investors who finance a mortgage loan can be calm, because the fulfillment of all obligations is controlled by smart contracts, a credit rating system and verification procedures.
The participation of the buyer of property in the process of mortgage lending is as follows. First of all, the buyer must make a request for a loan for the purchase of housing or any other real estate. This application will be accepted by investors who want to finance such a loan in order to subsequently profit from it.
After the buyer puts forward the terms of the loan, he begins the verification procedure, after which investors finance this loan. In some ways, this is reminiscent of the ICO, only investors are investing money not in the implementation of the project, but in buying real estate, buying not the project's tokens, but FMS is the Fractional Mortgage Shares.
Ultimately, the buyer of real estate receives funds, buys a home or some other real estate and monthly pays a mortgage debt, which is distributed among investors.