Using your house/landed property as collateral

[Anachiwo]

I would like to throw this question out in the open, first would be get a loan from banks to start up a new business? If you are granted this loan application, would you be comfortable putting up your house or landed property up as a collateral for getting the loan?

[Kakashi2020]

In my opinion it is unwise to get a loan from a bank to put up a business more so having your property as collateral unless the said property is not that valuable or is quite useless to you. If that's the case then I'm all for it. But if the property is prime then it's better to sell it and use part of the money to put up your business. Bank loans can be such a headache and it's best to stay clear of loans and mortgages.

[Anachiwo]

[quote quote=1589]In my opinion it is unwise to get a loan from a bank to put up a business more so having your property as collateral unless the said property is not that valuable or is quite useless to you. If that’s the case then I’m all for it. But if the property is prime then it’s better to sell it and use part of the money to put up your business. Bank loans can be such a headache and it’s best to stay clear of loans and mortgages.[/quote]

I think I agree with you here @Kakashi2020, the pressure alone from having to work with a bank loan can be so disorienting that you would lack focus until you have the loan repaid completely. And from the stories that I have heard so far, banks are very merciless when it comes to confiscating your property when you fail to meet up with paying back the loan given. They would never consider giving you extra time to be able to pay, so it's best to stay away from bank loans as possible as you can.

[Heatman]

This is a very critical decision to make but I believe it depends on a lot of variables for me to conclude on the decision to use my house or landed property to secure a bank loan.

Now the first thing to consider is the amount of money involved with the loan I needed. If it's a substantial amount of money, then looking at using my house or landed property as collateral should be a reasonable option.

Secondly, the means or method of payment of the loan and the duration of the loan. If these conditions are favorable, I will possibly consider the options.

Then finally, my purpose of needing such loan. If it's something that I have analysed properly and everything pans out well that investing such loan would bear more profits, then I'm all in with getting such loan with my house or landed property as collateral.

[Martinsx]

[quote quote=1642]This is a very critical decision to make but I believe it depends on a lot of variables for me to conclude on the decision to use my house or landed property to secure a bank loan.

Now the first thing to consider is the amount of money involved with the loan I needed. If it’s a substantial amount of money, then looking at using my house or landed property as collateral should be a reasonable option.

Secondly, the means or method of payment of the loan and the duration of the loan. If these conditions are favorable, I will possibly consider the options.

Then finally, my purpose of needing such loan. If it’s something that I have analysed properly and everything pans out well that investing such loan would bear more profits, then I’m all in with getting such loan with my house or landed property as collateral.[/quote]

I think that you made a very strong case on things to consider before making a decision on getting a bank loan with one's house or landed property. If one makes sure to follow all these steps in securing the loan, I definitely think it's worth giving a shot.

Bank loans aren't easy at all to secure, so it's very important to ensure that all angles are covered before getting them or otherwise, it's going to be a bad decision for that individual.

[Anachiwo]

[quote quote=1642]This is a very critical decision to make but I believe it depends on a lot of variables for me to conclude on the decision to use my house or landed property to secure a bank loan.

Now the first thing to consider is the amount of money involved with the loan I needed. If it’s a substantial amount of money, then looking at using my house or landed property as collateral should be a reasonable option.

Secondly, the means or method of payment of the loan and the duration of the loan. If these conditions are favorable, I will possibly consider the options.

Then finally, my purpose of needing such loan. If it’s something that I have analysed properly and everything pans out well that investing such loan would bear more profits, then I’m all in with getting such loan with my house or landed property as collateral.[/quote]

I believe that this is the best thing I have ever heard about how to go about planning and getting a loan with either one's landed property or house. Thanks a lot for the input, it's very informative and I'm definitely keeping the information you discussed here close to heart should I be needing to make such decisions in the nearest future.

[Martin]

A very common thing to do, it is very risky though. I would, but only if I was pretty sure the business would be successful. I think it requires calculating risk for it to be a smart decision to make.

[jyy]

This is funny cause you would have to! You don't have a choice normally. Anyway, what would be some situations where you didn't have to do that? Well, I suppose owning an expensive car would be one.

[Barida]

Honestly speaking, I wouldn't want to risk my landed property as a collateral for getting loan from a bank or any financial institution. The reason is simply because we know the risks involved in getting loans which one of them is the future unpreditable risk. So because I don't know what might happen in the future, using my house as a collateral for loan is out of the option for me in the sense that I would rather use a mobile car instead of a house in getting loans.

[Mozzie]

Not in the current economy we have now, it is to unstable with interest rates, and i wouldn't put up my house against a loan.