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The Importance of a Site Visit When Requesting a Loan
So here we go. We received an application for a loan of $150,000 USD. The property is in Quepos, a nice area, and the pictures were quite good. The appraised value was $420,000 USD. As a result, everything looks great on the surface.
The Directions
We were not able to get the exact location. The applicant was technically challenged and needed to learn how to send us coordinates (it happens). We told him about our site visit cost and evaluation fee. There was an agreement of $250 USD for the day trip (which covers gas and lunch). The money was to be on hand upon our arrival. That is why we ask for the funds in advance.
Again, everything was moving along smoothly. Then it started. The directions given were a couple of kilometers down a dirt road! It was beginning to look less attractive. But we decided to go because of all of the above reasons.
With directions via text message, we planned to leave at 8:30 am and arrive by 11:30 am. We knew about the main bridge between Alajuela and San Jose but figured everything should work out since we were going in the opposite direction. WRONG! Two hours to get from Escazú to La Guacima toll. The highway is like a parking lot! Pura Vida…
The Search
We are going towards Quepos, and the directions state to the Maxi Palí in Quepos. We are thinking about the one close to the downtown core. Wrong again. It is the big one on the “Costanera” highway.
We stop and call for clarification. “Oh, only a few kilometers further, and hang a left on the dirt road by the gas station.” Hmm. The left takes us further away from Quepos and towards the mountains. Quepos is the other way. Even though it was already about 100+ degrees outside, temperatures started rising dramatically in the car.
Ten kilometers later, down a bumpy, dusty road, we find this little town with a name we had never heard of. You know, where the mayor is the store owner, the “diputado” (congressman) owns the soda, etc. Well, we are here now.
The House – Or What’s Left of It!
We pull up to this walled house with a large black gate. It opens, and let me tell you, he is quite the photographer because the house did not look anywhere near as lovely as the pictures he sent. The grounds were a mess; the Jacuzzi was nearly empty with that beautiful fluorescent green water on the bottom.
Our American friend was sitting at the rancho, which looked over the pool. We went over to him, rather upset, and began to gather the details. But first things first. Site visit fee. “I am sorry, I only have $100 USD.” My associate was pretty much going Super Nova at this point.
The house tour started, and it was terrific, but in a wrong way. The TVs were gone, the oven was gone, half the beds were missing, and all the toilets were used and not flushed. Was the water on or shut off? So, one of two things; this gentleman was going through a tough financial hardship, or he was trying to get us to “buy the house” with the loan.
Finally, the applicant provided his appraisal. If you have a review, receiving it before the site visit would be great. He estimated the land value was $100 USD per square meter!!!! We would never have bothered to pursue the loan had we seen that! We said that there were too many zeroes. Enough was enough. We left for Quepos, which was 30 minutes away, for a cold drink at the new marina.
The Point of the Site Visit
The entire point of the site visit is to determine the property’s value and validate that all the information on the application is accurate and true. Therefore, making the property as pristine as possible is a must. If you ask for $150,000 USD of someone else’s hard-earned money, you can at least put the time and effort into making the property look its best, and if you are in a dire financial position, let us know first. We may be able to assist you in other areas because we have contacts in various fields.
Conclusion:
In conclusion, Honesty works best! A home equity loan can be a valuable financial tool for homeowners who need to access funds for a variety of reasons. Whether you’re looking to make home improvements, pay for college tuition, or consolidate high-interest debt, a home equity loan can provide a lump sum of money at a competitive interest rate. However, it’s important to carefully consider the potential risks and benefits before taking out a loan, and to work with a reputable lender who can guide you through the application process. With the right strategy and a solid financial plan, a home equity loan can be a smart way to achieve your goals and improve your financial well-being.
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Frequently Asked Questions
How much equity do I need to qualify for a home equity loan?
Typically, you must have at least 50% equity in your home to qualify for a home equity loan, although some lenders may accept less.
What can I use a home equity loan for?
You can use a home equity loan for various purposes, including home or business improvements or renovations, health expenses, or unexpected expenses.
What is the interest rate on a home equity loan?
The interest rate on a home equity loan is typically lower than that of a personal loan or credit card because your home secures the loan. However, the exact interest rate you qualify for will depend on your home’s equity.
How long does it take to get a home equity loan?
The timeline for getting a home equity loan can vary depending on the lender and the specifics of your situation. Typically, the process takes a couple of weeks to complete.
What happens if I can’t repay my home equity loan?
If you cannot make your monthly payments on your home equity loan, you risk defaulting on the loan and potentially losing your home. Taking out a home equity loan is essential only if you are confident you can make the monthly payments.
How do I choose the right lender for my home equity loan?
When choosing a lender for your home equity loan, it’s essential to consider factors such as interest rates, fees, and customer service. You may also want to read online reviews or ask for recommendations from friends or family members who have previously taken out home equity loans.
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Article by Glenn Tellier (Founder of CRIE and Grupo Gap)
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