Follow these easy steps to get cash for your house

In difficult times or in periods when you need a quick means of financing a venture or an asset, your house or other real estate property stands you in good stead for obtaining a cash advance.

There are certain preconditions attached to these transactions, and this short article looks at what these conditions are and the steps you are required to take for turning your house into ready cash, while you still remain the owner.

Preconditions for raising cash against your house

The first and most important condition for obtaining cash for your house is that your property must be completely paid up. There should be no bond balance due or other liabilities against your real estate, such as mortgage loans.

Your house must have a minimum value of at least R 400 000, though the maximum value is not limited. Cash-raising deals on this basis can extend to several million rands.

The property in question must be owned by a trust or company, or in certain circumstances if the person wanting to raise finance owns a company or is a director of a company, he or she may qualify.

Loans against this kind of property have a set minimum amount of R 50 000, with a maximum repayment term of one year, though this can be restructured in some cases to extend to 36 months.

Six months bank statements are also crucial in qualifying for a loan from FIRST ADVANCE. Ethically and legally, you can’t be offered a loan if you are unable to afford the monthly payments, or if it’s noticed that the capital amount will never be able to be paid back. This is called reckless lending and it is something any credible loan provider does not indulge in.

How the deal works

The basis of this type of deal is that it is a loan offered to a company rather than to an individual. It is really a way of raising cash for your house using it as collateral.

The deal is done by a private financial advance group rather than by a bank, with loans registered against unbonded property that is treated as a company asset.

This is an efficient and easy way to raise funds through a collateral-based loan when normal banking systems are unable to unwilling advance such payments.

The application process is usually smooth and flexible, and the procedure is transparent. Waiting periods are relatively short, and no restrictions are imposed on the uses to which the borrower intends to put the funds.

Steps to take

Before applying for cash for your house, ensure that the property is in the name of a company or a trust. If not, FIRST ADVANCE in certain circumstances looks at your application if you own a company or are a director of a company.

There is no need to provide credit references as the redemption of the loan amount is calculated solely against the value of the property, or, where other company assets are in question, on the calculated values of these.

Be aware that other entities such as vehicles, earth-moving equipment, caravans, jewellery, and so forth, can also constitute additional security for such a loan.

Be sure to calculate your realistic ability to repay the advance by means of a verified cash flow projection, bearing in mind that interest rates in these cases, though they can be as low as 3% per month, are likely to be set somewhat higher than that figure, depending on the element of risk involved.

Once you have ensured that all these factors are in place, you are all set up to apply for this method of obtaining cash when you really need it.

Also read: Ten things to consider when buying a new home