What is real estate titled loan? Merits / demerits that I would like to confirm

In the case of trying to receive a loan, there are two types of loans, loaned and secured loans, and there are various kinds depending on what kind of collateralized loan among collateralized loans I will. Also focuses on Real Estate Titled Loans this time in that, explains the benefits and disadvantages, how to choose the point of Real Estate Titled Loans.

What is Real Estate Titled Loan

Real estate secured financing refers to borrowing a loan from a bank or other financial institution with collateral for real estate such as land and buildings. Upon utilization, we receive judgment on the value of collateral of real estate and the ability of borrowers to pay, and the loan amount etc. are decided according to them. In general, there is a characteristic that the amount borrowed at one time is larger than unsecured loans, the interest rate is low and long-term repayment is also possible, and it is used by many people.

Benefits of real estate secured financing

In general, the benefits of real estate loans are as follows.

Loans accepted are expensive

In many unsecured loans it is difficult to obtain a high loan amount because the upper limit of the loan amount is set by the annual income etc. of the borrower. On the other hand, in the case of Real Estate Titled Loans, there is a relatively secure collateral called real estate, so there are merits that you can also receive high loans depending on the value of collateral real estate. Therefore it is suitable not only for personal use but also for corporate use etc.

The repayment period can be set for a long time

Due to the relatively secure collateral, in many cases it is also possible to set the repayment amount monthly to a lower value by prolonging the repayment period compared to unsecured loans. Therefore, there is an advantage that you can set up a repayment plan with a margin.

Low interest rates

By using real estate as collateral, it is possible for financial companies to reduce the risk of uncollectibility, so you can get loans at low interest rates compared to unsecured loans.

Sometimes a joint guarantor is unnecessary

In unsecured loans, etc., it is necessary to set guarantors in most cases, but in the case of Real Estate Titled Loans, even if it becomes impossible to repay, real estate can be sold and repayment can be made, so a joint guarantor is not required in some cases.

Disadvantages of real estate secured financing

On the other hand, the following disadvantages exist in Real Estate Titled Loans.

Various expenses are required when using

A fee of 1 to 3% of the loan amount may be required when using Real Estate Titled Loans. In addition, it is necessary to pay the registration fee of the mortgage and, in some cases, the appraisal fee of the real estate. Therefore, it is necessary to prepare some amount of cash beforehand.

I lose real estate when I can not repay it

As a matter of course, because you are receiving loans with real estate as collateral, you will have to sell the real estate if you can not repay it.

It takes time to receive loans

It takes time to review for evaluating the collateral value of real estate, etc. It takes 1 to 2 weeks for loans to be general. Therefore, it is not suitable for cases where you want to receive loans as soon as possible.

Penalties may be generated at the time of cancellation in the midway

Depending on the terms of the loan, you may be charged a penalty equivalent to a few percent of the amount of the outstanding balance when you terminate halfway due to refinancing to another company.

Points of how to choose real estate secured financing

So, how do you choose Real Estate Titled Loans? Companies handling real estate secured financing are broadly divided into banks and nonbanks such as consumer finance. First let’s look at the features and differences between them.

Bank characteristics

As a characteristic of the bank, the examination is strict and it takes time to finance and the maximum loan amount is also low, but the overall interest rate is low, and the various expenses at the time of use are often cheaper than non-bank.

Features of nonbank

On the other hand, nonbanks tend to have higher rates of real estate than banks, although interest rates are often higher compared to banks but there are plenty of kinds of products. In addition, there are many companies that have established their own examination standards, and the speed of the appraisal is fast and the maximum loan amount is often high in many cases.

Based on these characteristics, we need to consider which is more appropriate considering the amount of money you need, time to finance, repayment plan etc.

Real interest rate with fee added is important

In order to receive Real Estate Titled Loans fees such as loan commission and registration fee for mortgage are required. Interest rates that add these fees to superficial interest rates are called real interest rates, but since there are cases where the surface interest rate is low but the fee is high, it is important to choose with real interest rates.

Please be sure to check the details on how much fee other than interest rate will be required to execute the loan. Let’s consider whether it will be a reasonable repayment plan after incorporating fees and various expenses.

Since the repayment plan also changes according to repayment method such as principal and interest repayment or principal equal repayment, it is necessary to confirm beforehand about repayment method.

Preliminary survey before receiving Real Estate Titled Loans is important

Loans based on real estate collateral are advantageous in that they can receive a large amount of loan compared with unsecured loans, but careful selection of dealers and repayment plans are required accordingly.

Based on the points of how to choose, let’s judge carefully after taking estimates from multiple business operators.

Real Estate Titled Loan for new businesses making use of cloud funding

We provide Real Estate Titled Loans for new businesses that utilize cloud funding. Annual interest rate 5.0% center ยท Loan amount up to 500 million yen, repayment of principal at a time is possible, joint guarantee is unnecessary, funds use free, etc. are characterized. Please feel free to contact us first.