WTK: Using land as collateral for a loan

[The_Honourable]

Need some advice tuners,

What is the procedure for using vacant land as collateral to get a loan?

Where are the best places to go to? The local banks? Credit unions? TTMF?

What percent of the value of the land these institutions will give out?

What are the interest rates like?

Thanks!

[crazychinee]

Is the land town and country approved? Do you have an updated valuation?

[Azzuri]

Ok giving my recent mortgage experience i can provide some guidence.

You will only get a loan once you have means of paying them back....meaning some income.

Using the land as collateral will bring your interest rates down and possible give you better terms in your loan.

I assume you wish to build on the said land right? If you own it fully (not under a mortgage) then the bank will more than likely give you 5.5% interest and maybe up to 30 years to pay back.

[The_Honourable]

Is the land town and country approved? Do you have an updated valuation?

Yes it is T&C approved but no valuation as yet.

Ok giving my recent mortgage experience i can provide some guidence.

You will only get a loan once you have means of paying them back....meaning some income.

Using the land as collateral will bring your interest rates down and possible give you better terms in your loan.

I assume you wish to build on the said land right? If you own it fully (not under a mortgage) then the bank will more than likely give you 5.5% interest and maybe up to 30 years to pay back.

Glad to hear rates would be lower and the possibility of better terms. Which institution did you deal with Azzuri?

Yes it is owned fully. I'm planning to build on the land or do plan B, use the loan to purchase a property for rental where i'll use the property to pay off the loan.

[crazychinee]

Why not then mortgage the new property to be purchased instead of taking out a loan using the land?

Talk to a few banks, everyone will advise doing things slightly differently, and you can save some legal fees by getting indepth help.

Scotia and RBC have always been easier to source home/land financing vs some of the other institutions.

[The_Honourable]

Why not then mortgage the new property to be purchased instead of taking out a loan using the land?

Talk to a few banks, everyone will advise doing things slightly differently, and you can save some legal fees by getting indepth help.

Scotia and RBC have always been easier to source home/land financing vs some of the other institutions.

I have no cash to purchase a property at this time. The land just there doing nothing. Have no funds to further develop, and not planning on selling.

Will do. I have scotia in mind but still want some opinions on other institutions.

[crazychinee]

Why not then mortgage the new property to be purchased instead of taking out a loan using the land?

Talk to a few banks, everyone will advise doing things slightly differently, and you can save some legal fees by getting indepth help.

Scotia and RBC have always been easier to source home/land financing vs some of the other institutions.

I have no cash to purchase a property at this time. The land just there doing nothing. Have no funds to further develop, and not planning on selling.

Will do. I have scotia in mind but still want some opinions on other institutions.

Try TTMF.
Well you will need at least the 10% down for house/land, or 20% for land alone.
Stay away from credit unions, 1% a month on a reducing balance makes no sense considering the current MMR.


Tatil and a few other instituions offer financing, but you want good closing costs and a fast approval/transaction.

You will still need between 30 to 40% of your salary/income available to repay.
Not hard to calculate, and use a mortgage calculator online to see.
I can't see a reason for letting the bank know you hvae existing land, unless you get denied for the new mortgage/loan. Dont bring it up, only on your statement of affairs make a note.

Options are
1) Mortgage new purchase
2) Mortgage current land to bank, and use the cash to buy new property.

Either way you're going to be paying for a valuation, alot will come down to the value and desirablilty of the new property. If the new prop is in a sheit area, it can be valued high and the bank might still not want to approve the loan.
eg: a 10M mansion in moruga. The valuator might give you 10M, but...if you default who really is going to buy it from the bank?

[The_Honourable]

Why not then mortgage the new property to be purchased instead of taking out a loan using the land?

Talk to a few banks, everyone will advise doing things slightly differently, and you can save some legal fees by getting indepth help.

Scotia and RBC have always been easier to source home/land financing vs some of the other institutions.

I have no cash to purchase a property at this time. The land just there doing nothing. Have no funds to further develop, and not planning on selling.

Will do. I have scotia in mind but still want some opinions on other institutions.

Try TTMF.
Well you will need at least the 10% down for house/land, or 20% for land alone.
Stay away from credit unions, 1% a month on a reducing balance makes no sense considering the current MMR.


Tatil and a few other instituions offer financing, but you want good closing costs and a fast approval/transaction.

You will still need between 30 to 40% of your salary/income available to repay.
Not hard to calculate, and use a mortgage calculator online to see.
I can't see a reason for letting the bank know you hvae existing land, unless you get denied for the new mortgage/loan. Dont bring it up, only on your statement of affairs make a note.

Options are
1) Mortgage new purchase
2) Mortgage current land to bank, and use the cash to buy new property.

Either way you're going to be paying for a valuation, alot will come down to the value and desirablilty of the new property. If the new prop is in a sheit area, it can be valued high and the bank might still not want to approve the loan.
eg: a 10M mansion in moruga. The valuator might give you 10M, but...if you default who really is going to buy it from the bank?

TTMF sounds like a plan. I'll check them within a week or two.

The reason is that I don't have cash to make the 10%, that is why I have to let them know I have collateral meaning I have to go for option 2. If I have cash to make the 10%, option 1 for sure.

I get your example fully, because at the end of the day, the bank has to approve the property and needs to sell it in case the owner defaults. The trick is to find such property which, the bank would approve, can purchase fully, and is rent-able.

Do you or anybody have experience with the Home Mortgage Bank?

[Mowally]

Why not then mortgage the new property to be purchased instead of taking out a loan using the land?

Talk to a few banks, everyone will advise doing things slightly differently, and you can save some legal fees by getting indepth help.

Scotia and RBC have always been easier to source home/land financing vs some of the other institutions.

I have no cash to purchase a property at this time. The land just there doing nothing. Have no funds to further develop, and not planning on selling.

Will do. I have scotia in mind but still want some opinions on other institutions.

Try TTMF.
Well you will need at least the 10% down for house/land, or 20% for land alone.
Stay away from credit unions, 1% a month on a reducing balance makes no sense considering the current MMR.


Tatil and a few other instituions offer financing, but you want good closing costs and a fast approval/transaction.

You will still need between 30 to 40% of your salary/income available to repay.
Not hard to calculate, and use a mortgage calculator online to see.
I can't see a reason for letting the bank know you hvae existing land, unless you get denied for the new mortgage/loan. Dont bring it up, only on your statement of affairs make a note.

Options are
1) Mortgage new purchase
2) Mortgage current land to bank, and use the cash to buy new property.

Either way you're going to be paying for a valuation, alot will come down to the value and desirablilty of the new property. If the new prop is in a sheit area, it can be valued high and the bank might still not want to approve the loan.
eg: a 10M mansion in moruga. The valuator might give you 10M, but...if you default who really is going to buy it from the bank?

TTMF sounds like a plan. I'll check them within a week or two.

The reason is that I don't have cash to make the 10%, that is why I have to let them know I have collateral meaning I have to go for option 2. If I have cash to make the 10%, option 1 for sure.

I get your example fully, because at the end of the day, the bank has to approve the property and needs to sell it in case the owner defaults. The trick is to find such property which, the bank would approve, can purchase fully, and is rent-able.

Do you or anybody have experience with the Home Mortgage Bank?

What was the outcome for you with this endeavour?

[The_Honourable]

What was the outcome for you with this endeavour?

Land wasn't T&C approved plus the loan i was getting was not enough with land as collateral. I realized that if I wait, i can build up funds and get T&C approval which would be a plus. What i didn't know initially is that the land can be approved from agricultural to residential as i am near a town center which means the value will automatically go up, an even bigger plus so i'm in the process of doing that.

After approval and if i push, i can further subdivide into residential lots but THAT would be costly (box drain, wasa, t&tec, etc).

[Mowally]

Kk.. so how does the 'land as collateral ' process work?

[De Dragon]

Kk.. so how does the 'land as collateral ' process work?

Basically, like any collateral, you have to show that the land is worth the amount you want to borrow, interest included. T/C approval, along with a valuation, and title search is what the banks tend to want to see.

[The_Honourable]

Kk.. so how does the 'land as collateral ' process work?

Basically, like any collateral, you have to show that the land is worth the amount you want to borrow, interest included. T/C approval, along with a valuation, and title search is what the banks tend to want to see.

Yep, plus free from all encumbrances like a mortgage, court matter, etc.

Your must be the legal owner of the land. If your legal ownership is joint to someone else, they have to agree and sign off also.

[nervewrecker]

We must discuss this next time I stop by.

[Mowally]

Kk.. so how does the 'land as collateral ' process work?

Basically, like any collateral, you have to show that the land is worth the amount you want to borrow, interest included. T/C approval, along with a valuation, and title search is what the banks tend to want to see.

Yep, plus free from all encumbrances like a mortgage, court matter, etc.

Your must be the legal owner of the land. If your legal ownership is joint to someone else, they have to agree and sign off also.

If the land is in developed area.. the bank still needs T&C approval? How long does it to get one's name on a deed?

[nervewrecker]

Kk.. so how does the 'land as collateral ' process work?

Basically, like any collateral, you have to show that the land is worth the amount you want to borrow, interest included. T/C approval, along with a valuation, and title search is what the banks tend to want to see.

Yep, plus free from all encumbrances like a mortgage, court matter, etc.

Your must be the legal owner of the land. If your legal ownership is joint to someone else, they have to agree and sign off also.

If the land is in developed area.. the bank still needs T&C approval? How long does it to get one's name on a deed?

Took me a few weeks iirc.

[De Dragon]

Kk.. so how does the 'land as collateral ' process work?

Basically, like any collateral, you have to show that the land is worth the amount you want to borrow, interest included. T/C approval, along with a valuation, and title search is what the banks tend to want to see.

Yep, plus free from all encumbrances like a mortgage, court matter, etc.

Your must be the legal owner of the land. If your legal ownership is joint to someone else, they have to agree and sign off also.

If the land is in developed area.. the bank still needs T&C approval? How long does it to get one's name on a deed?

Once they are lending you the money, the bank always wants T/C certification.

[Mowally]

How long does that take?

[ProtonPowder]

T&C is a thing that takes months to happen if you dont know someone, or go through a surveyor/architect etc that has links with them

[The_Honourable]

Once no queries, it will take about 2 months or more for your name to end up on a conveyance deed. If is RPO/RPA lands which involves a certificate of title (CT), about the same time frame.

http://gittenssmart.com/conveyancing.html

Yes, banks and most lending institutions not going and take any property as collateral without T&C approvals. How long it takes depends on many factors. If you not sure of your land status, check T&C and they will check their statutory records which takes less than a month (well in south). Some lands (like cities of Port of Spain and San Fernando "proper") already have approvals long before the T&C act of 1969.

We must discuss this next time I stop by.

No problem

[Mowally]

Once no queries, it will take about 2 months or more for your name to end up on a conveyance deed. If is RPO/RPA lands which involves a certificate of title (CT), about the same time frame.

http://gittenssmart.com/conveyancing.html

Yes, banks and most lending institutions not going and take any property as collateral without T&C approvals. How long it takes depends on many factors. If you not sure of your land status, check T&C and they will check their statutory records which takes less than a month (well in south). Some lands (like cities of Port of Spain and San Fernando "proper") already have approvals long before the T&C act of 1969.

We must discuss this next time I stop by.

No problem

I'll make some calls today.

[rspann]

T&C is a thing that takes months to happen if you dont know someone, or go through a surveyor/architect etc that has links with them

You get through real fast if you use the blue forms.

[Mowally]

Good afternoon ppl, so I've some more questions for those out there.
I'd like to get a secured loan, where land will be used as collateral but the ownership is not in my name. I was told the land has no encumbrances & there's T&C approval. I need to know what is the time frame for the loan to be granted. And also any valuators on this thread? Need advice/info asap.

[Mowally]

Good afternoon ppl, so I've some more questions for those out there.
I'd like to get a secured loan, where land will be used as collateral but the ownership is not in my name. I was told the land has no encumbrances & there's T&C approval. I need to know what is the time frame for the loan to be granted. And also any valuators on this thread? Need advice/info asap.

[ProtonPowder]

The only way to use somebody else land as collateral is if they are the borrower or co-borrower, and even then, unless is immediate family or spouse, the bank will look at it very funny. Even as co-borrowers, you will both be jointly and severally liable, I have to stress that.

Also keep in mind that people cant give away valuation advice without being contractually engaged, it has caused problems for many a valuer in the past.

[Mowally]

The only way to use somebody else land as collateral is if they are the borrower or co-borrower, and even then, unless is immediate family or spouse, the bank will look at it very funny. Even as co-borrowers, you will both be jointly and severally liable, I have to stress that.

Also keep in mind that people cant give away valuation advice without being contractually engaged, it has caused problems for many a valuer in the past.

Thank you Sir. This info sheds so much light to my situ. I just contacted a Valuator.. I'm willing to pay for services rendered.
So now I'm curious as to how much I can receive with parcel of land. Anybody with a ballpark figure?

[rspann]

These questions cannot be answered because it varies from case to case. You have to approach a financial institution and it is they who will assess the situation and tell you if you qualify and what are the terms of engagement. The rates and conditions vary according to what is presented to them. The question is vague and does not specify location, size ,situation and other general conditions which dictate the value like distance from roads,transportation, electricity, water, flooding etc.

5000sq ft in Barrackpore or Moruga has a different value to 5000sq ft in San Juan or Valsayn.

[The_Honourable]

Ownership not under your name? Under whose name you want to put it on? Your wife or child? Anyhow you take it, the bank will want your name on the paperwork whether singular or joint to others like a wife.

Spann explained it perfectly. You have to give us the location, square footage, distance to the nearest town or city, plus lots of other questions for us to give you an idea on the value of the property. If is vacant land, you can check those real estate sites where you can search for lands for sale in the area and average how much it can go for. That method is not perfect as there are many nuances but at least you will get an idea.

If it's a house, worse yet as not all houses are the same. A concrete house will be valued different from a board house. A house with 5 bedrooms, 3 baths and a pool not going to have the same value as a 2 bedroom 1 bath house. A house 50 years old not going to have the same value as another that is only 5 years old. A house on the main road will not have the same value as one down the street inside a trace bordering a river. A house that have a commercial space downstairs will be valued different that another that only have a garage. A house that is 5 mins away from a mall will be valued differently that one blocks away even though both in the same area or district. And get this... a house next to a proposed or existing HDC development will be priced differently (usually lower) than one far away from it.

[Mowally]

Thanks man... I just needed alil guidance. I've been burnt badly before when coming to purchasing property 'under d table'.. so I'm trying to use what's available to me to get what I want.. if yuh no what I mean.

[The_Honourable]

Thanks man... I just needed alil guidance. I've been burnt badly before when coming to purchasing property 'under d table'.. so I'm trying to use what's available to me to get what I want.. if yuh no what I mean.

Is tuner dawg... do tell

Your experience might save someone reading this ched from getting burn.