Title Deed Loans
About Title deed loans
Land can act as a powerful form of collateral in the event that an individual may have the need to secure a loan. The title deeds are usually used as collateral.
Depending on your prior borrowing history as well as the size of loan that you need, you may be required to use something as substantial as land or property in order to secure funding. The good thing about listing your property as collateral is that the process can be accomplished without a hassle.
In order for you to begin the process of listing your property as collateral, ensure the value of your property has been assessed by a qualified valuer.
Many people actually acquire land solely for that purpose as banks and other lenders and financiers have developed revolutionary plot loan facilities which enable the land owners to fulfill their desires of acquiring a loan in an easy and accessible way.
Identifying the Right Lender
Although land is considered a qualified form of collateral, you may want to consider specific lenders as they may be more receptive than others.
In order to start this identification process, it is wise to have a series of compatible lenders then assess and compare their policies, terms and conditions,.
Your first choice may not always be the right choice when it comes to selection. Always ensure that you find the best possible terms, which include important parameters such as interest rates and length of repayment methods that match your needs.
Valuation of your Property
If you are certain you want to use your land as collateral, you will need to know exactly how much your land is worth. There is a wide variety of factors that can influence the value of your land holdings. An appraisal will be required before you execute your loan. To make this possible, you will be needed to hire a professional appraiser, one that has been selected or approved by your desired lender.
When the process of valuation is over with, your lender will provide you with a set of terms and conditions of the loan as well as policies, which you may accept or disregard as you see fit.
A search on the property and finalization
After the land appraisal is complete your lender likely will want to conduct a land search to ascertain that it has no additional mortgages and loans already registered under the title. This will affect the likelihood for your loan to be approved. The condition of your land and its current level of development will influence the terms of lending that you are offered.
Regardless of the particular details, it is important to remember that at any point in the process, you have the option of leaving and disregarding the negotiations to seek out alternative lenders.
Using your property as collateral represents a significant financial move that should only be entered into under the appropriate circumstances.
Make sure you are comfortable with the terms of the loan before you launch further.
Requirements
Title deed loans are secured with a land title Deed or a Certificate of Lease.
Other documents that are needed to facilitate a title deed loan, alongside the title deed of the property, are:
- Copy of national ID or KRA PIN certificate of individual or business (directors)
- Duly filled application form.
- Duly signed spousal consent forms
- Pay slips for the past 3 months
- Letter from employer confirming employment status
- Bank statements for the past 6 months
- One passport size photograph
- Land search and valuation
Most of these lenders aid those unable to access financial services. If you have a piece of property just sitting there yet you are in dire need of capital, do not hesitate to ask for a loan with your title from a credible organization or bank.
Key Consideration
Make sure you understand all the terms and policies before you sign any documents as these legal documents are binding and if not well read can lead to misunderstandings in the future.
Care must be taken to avoid falling behind on your loan payments and potentially losing your house or your piece of land.
Also remember that interest rates using land as collateral are often quite high. In some cases, interest rates may approach 15 percent. This interest rate is often comparable to forms of lending that require no collateral, such as credit cards. If another form of collateral is available to you, it might be worth your time to explore what those options. This is an important consideration, particularly in situations where you might be seeking to stretch your repayment out over a longer period of time.
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