Caveat Loan Guide | Funding

CAVEAT LOAN GUIDE

What is a caveat loan?

Caveat loans are fast and easy way to access money when you need it the most. This type of financing is a means of obtaining funds very quickly. A caveat loan must be secured by real estate and can be used for personal or business purposes. 

This type of loan can be behind the first mortgage on your property or can be the first charge if you own the property unencumbered. 

How does a caveat loan work?

A caveat loan can be one of the fastest avenues to access funding on an urgent basis. Because of this, interest rates can be high and it’s only suitable as a short term period. 

Depending on the lender and your circumstances, this type of loan can be extremely flexible with 24 hour approvals, no valuation, low doc, bad credit history considered etc. The interest n the loan can also be prepaid. Terms often range from 1 to 12 months. 

With this type of a loan, you will need a repayment plan. A caveat loan can be repaid through refinance, sale of property or any other existing strategy that the lender approves of. The lenders have their own criteria in determining how your are going to repay the loan at the end of the loan term.

Pros:

  • Bridging solutions: Caveat loans acts as a quick bridging solution where there is a gap between funding.
  • Quick approvals: Typically, it takes between 24 to 48 hours for approval on a caveat loan. This makes it a great choice for business owners to overcome your urgent cash flow problems. 
  • Low Document: Due to the use of property as a security, you don’t have to provide a lot of paperwork and documents for this loan. It also aids in the speed if the application process. 

Cons:

  • Caveat loans are suitable only for short-term needs.
  • A caveat prevents any other dealings on the property until the loan repaid.
  • The cost of a caveat loan is higher than other loan types. 

Things to consider:

  • It is crucial that you understand the key features of caveat loans before you apply for one.
  • You generally need two key requirements in applying for these short-term caveat loans (amongst others). The first requirement we covered above, it is sufficient equity in your real estate security and the second is a planned exit strategy. There are other requirements, however things like tax returns, good credit history and son on are not standard requirements. 

Learn more about Funding’s caveat loans or get an obligation free express quote today. 

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Property loans for all purposes.

We lend to individuals and companies looking for short to medium term loans for any purpose. We take a common sense approach to lending and can often assist when the banks cannot.

  • Purchase, refinance or cash out.
  • Urgent bridging loans and short term loans.
  • Business and personal loans.
  • Vacant land.
  • Cash out & ATO Debts.
  • Commercial property.
  • Non-residents, bad credit or self employed.

FAQs

The obligation free conditional approval will outline all rates and fees. It is tailored to your specific loan needs.

The loan to value or LVR is the maximum lend secured over the property. Our typical LVR is 65% or lower of the property value. On some occasions, 70% may be considered depending on the location and type of security property.

Loan terms are typically between 1 and 36 months.

Residential, commercial and vacant land. In all metropolitan areas in all states.

Borrowers can be individuals, companies or trusts borrowing for any purpose including personal or business. Borrowers must have sound real estate security, the ability to meet their repayments and a strong repayment strategy to exit the loan at the end of the term.