Individual Mortgagees as A Solution for Real Estate Property Developers

Abstract

Not every people has the same willingness to make a full cash payment for a real estate purchase. Their financial capability to pay in cash and more aside, some people might decide that their reserved cash would better be allocated elsewhere to cover other needs, such as business financing or other investments. They would opt to fund their real estate purchase with bank loans, which is notoriously time-consuming and lengthy in process as well as demanding relatively high interest rates in return. However, banks are not the only available source of loans to consider. Individuals are alternative lenders with untapped potentials remained to be explored in fueling credit activities. Unfortunately, it remains that many are still apprehensive about granting loans for the fear of failure on the part of the debtors to make full repayment or return of their funds. Meanwhile, the Law of the Republic of Indonesia Number 4 Year 1996 concerning Mortgage over Land and Related Articles (hereinafter referred to as the “Mortgage Law”) provides that not only banks are entitled to grant credit. Individuals, albeit uncommon, could also do the same and be the solution to credit funding, receiving mortgage as the collateral to secure the full payment of debts.