Investing with Great Security
Mortgage-secured loans are very popular among Cashare investors. This is for good reason, as collateral reduces the default probability of a loan since the borrower doesn't want to risk losing their pledge.
In case of payment difficulties, the mortgage can also be liquidated. Thus, there has never been a default on mortgage-secured loans on the Cashare platform.
The higher security compared to a similar loan without a mortgage leads to a lower interest rate.
Valuation of the Mortgage
To estimate the value of a mortgage, Cashare's real estate specialist applies the methods common in Switzerland. An object is usually first assessed using the IAZI estimation tool according to the hedonic method.
For security reasons, only a maximum of 80% of the estimated value is considered as collateral for the loan project.
Different Types of Mortgages
A distinction can be made between: - Loans with a mortgage on the project being financed (a classic mortgage) - Projects with an additional mortgage
At Cashare – unlike a bank mortgage – it is possible to provide a promissory note on the owner's single-family home as security for an SME loan.
The Rank of the Mortgage
Another important property of the mortgage is the so-called rank. The rank indicates the order in which the mortgage comes into play in case of liquidation.
A first-rank mortgage receives its share from the sale proceeds first, then comes the second-rank mortgage. Therefore, a first-rank mortgage is the strongest security for mortgage-secured loans.
Your investment specialist Michael Boge
