Know which property types are least favourite for the banks and lenders
Banks and money lenders are the ones who provide the money to buy your dream home or property. It is a very sensitive matter to think about because if lender or bank approves the loan application then you can buy the property otherwise not. Make sure that property that you want to buy liked by the banks and lenders as they always try to limit their risk factor associated with the loan they are providing. Though residential property valuers can evaluate the property value and guides you on whether you should buy this property or not. For this, they use property valuation methods to find the actual market value of the property.
Bank and lenders are willing to provide loan on the properties that can be easy to sell if a borrower is not able to pay the money back. This is the reason why they have some of their favourite property types which are capable enough to give the loan amount back i.e easily can be sold out if required. Whereas for some property types finding buyers and selling them out is difficult for the banks and lenders if a borrower is not in the position to pay the money. As their objective is to recover the money as soon as possible, so they are least liking that property which takes time.
When banks are lending money against the property (as a security against home loan), they analyze the property from marketability and saleability point of view.
Banks are happy to lend money against the more attractive property with high demand.
But not for those whose marketability is challenged in future. So here is the list of properties that are the least favourite of lenders and banks.
1. Small size apartments – The size matters a lot while you are putting an application for the loan. For some 50 sqm or 40 sqm is a small size bank and they aren’t interested to provide loan against such small property. Banks and lenders want their money back if the borrower can’t then the property must be easy to sell and whose market value is not challenged.
2. Property in the risky neighbourhood – The property in the bad area with high crime and unemployment is the one which is more close to risk. Banks are not interested in providing loans against such properties, as it is difficult to find a buyer for such properties.
3. Property with structural issues – The property with the structural issues may put some hurdle in getting a loan against it. Because saleability of such buildings are not high and banks are less likely to provide loan against such properties.
4. Property’s location – The banks and lenders are less likely to finance for such properties which are constructed in rural areas, marshland, near coastal areas. The areas which are high-risk zones and which are not too much developed all these areas are having high geographical issues and hence banks are less likely to finance such properties.
Property valuers suggest that banks are more interested in the properties with high demand and value. Before financing, the bank wants to check, they can sell properties easily or not and at a similar value, if in the case a customer can no longer repay their loan.
Property valuers can also help you in finding the property that comes in banks favourite list. As they do have an idea about the bank’s loan criteria. Hire an expert property valuer for property valuations and know the right property value.