What is stratum title, and is it acceptable security?
Typically, a borrower will need to place a 20% deposit on a home, not including closing costs and other fees associated with purchasing a home. However, not everyone has a 20% deposit, meaning they have to look for other options. Mortgage House offers borrowers many lending opportunities for home loans, regardless of the deposit amount.
That being said, it is a risk for lenders to lend money to a buyer that does not have the full amount. The risk, though, is not too great to completely dissolve the idea. Instead, lenders may ask for a stratum title that acts as a form of security to lower the risk factor.
A stratum title is not offered to everyone, though. This title is a form of collateral. However, it does not mean that the lender will fund the amount 100%. Depending on the borrower’s loan application and income, they may only accept 85% of the loan, meaning the borrower will have to look for this amount.
Although a stratum title is one solution against paying a 20% deposit, sometimes borrowers can apply for a loan using a 10% deposit. The interest rate and repayment amount, though, are likely to increase.
Stratum Title Conclusion
Borrowers should not be fearful when looking for a home. If you do not have the full 20% value of your desired home, call a Mortgage House expert to discuss the many options! These experts can also bundle personal loans, car loans, and business loans in a convenient and quick fashion