What you should consider when pledging a property for a loan
Making a loan secured by real estate - a responsible transaction. It requires an informed decision, knowledge of the conditions and credit requirements.
On the security of which real estate banks provide loans
The first requirement of banking institutions in issuing loans is the liquidity of residential or commercial real estate. High liquidity serves as a money back guarantee.
The most common objects of collateral - apartments and houses. Almost all banks impose standard requirements for such real estate:
- location of the object - in the city or in elite cottage settlements;
- apartment or house should be in good condition, not to be dilapidated, emergency, should have a solid foundation base (reinforced concrete, stone, brick), reinforced concrete or metal floors;
- the property must have a working engineering - electricity, heat and water supply, water disposal;
- in apartments of high-rise buildings there should not be uncoordinated, illegal redevelopments.
- real estate should not be subject to reconstruction, overhaul, demolition.
Houses located 50 km from the capital and 30 km from the regional centers are considered low-liquid. Get a loan on the security of such objects is almost impossible.
From a legal point of view, the potential borrower must have documents on the right of individual property ownership. A loan secured by a share is extremely difficult to obtain, and banks are most often denied a loan in such cases. Another condition is the legal purity of the collateral object - the absence of encumbrances and claims from third parties.
Evaluation, rate, insurance
What else should be considered when applying to the bank for a loan, when you offer a flat, house, or other real estate as collateral? The borrower has the right to independently apply to the appraisal company, pay for the service and submit an appraisal report.Based on this document, the limit is calculated. The average loan amount ranges from 50 to 70% of the assessed value.
When mortgage loan applied lower interest rates for the use of cash loans. However, real estate is subject to insurance. The borrower pays the policy at the conclusion of the transaction. He is also obliged to extend it for the entire period of the loan repayment.
If the bank has refused a loan, it is advisable to contact other financial institutions. Cash collateral offered by pawnshops. Conditions are different. In the pawnshop Pledge, for example, you can get a loan secured by real estate, at the rate of 85% of the estimated value of the premises, here you will find the conditions of a financial transaction.
When applying for a loan and mortgaging a house or apartment in which the family lives, the borrower must take into account that he is taking a certain risk. If financial circumstances unfavorably develop that lead to non-fulfillment of debt obligations, housing may be lost. The lender will put the real estate up for auction for the sale and repayment of the loan received and not returned.