CashFree Hypo Loan

An investment into loans secured by a lien on real estate, used by people to top up the financing of their mortgage. In addition to security, the investment also offers attractive returns and the possibility of obtaining an investment bonus.

How does it work?

The CashFree Hypo Loan is used to top up mortgage financing for people buying a new or older property. To keep the borrower’s monthly budget as low as possible, the repayment amount is calculated over a 20-year period. However, the maturity for investors is a maximum of 3 years, after which the loan is refinanced (part of the principal is repaid in the last installment, when refinancing with a new loan takes place).

If you want to end your investment earlier, you can sell it at any time on our Secondary Market.

For this product, Žltý melón cooperates with selected developers or financial agents who specialize in mortgage advisory services.

Real estate collateral

The condition for receiving the loan is the approval of a mortgage loan from a bank operating in Slovakia. At the same time, the borrower signs a lien agreement in favor of Yellow Melon on the purchased property. The lien is ranked behind the financing bank in case of property sale. The lien is not immediately registered in the real estate cadastre upon loan disbursement; it serves as protection in case the borrower fails to repay and Yellow Melon must withdraw from the contract and declare the full loan due.

How else is your investment protected?

In addition to the requirement of a bank-approved mortgage loan and the lien agreement on the purchased property, we further protect your investment through the following mechanisms:

• Double creditworthiness check: The borrower has passed a credit assessment not only at Yellow Melon but also at the bank providing the mortgage for the purchase (this is one of the conditions for receiving the loan on Yellow Melon). The share of non-performing mortgages in the Slovak banking sector is extremely low, supporting a similar expected quality for your investment.
• Verified value and quality of the property: The property value and its marketability are assessed by the financing bank based on strict criteria. The bank is also legally limited in the maximum percentage of the property value it can finance. The remaining free value, up to 100%, serves as additional security for your investment.
• The loan funds are paid directly to the developer / seller, removing the risk that the buyer might use them for another purpose.
• Sufficient debt capacity of the borrower: Even though the loan is secured by real estate, every borrower undergoes detailed assessment at Yellow Melon, where we verify—among other indicators—their ability to repay all obligations including the mortgage and the Yellow Melon loan with sufficient reserve even in case of income reduction.
• Higher motivation for financial discipline: The borrower knows that if they fail to repay the Yellow Melon loan, we will take steps that may also trigger the acceleration of their mortgage. By not repaying, the borrower would knowingly risk losing their home.
• Loan repayment insurance: A condition for receiving the loan is insurance covering the borrower's repayment ability, at minimum covering all potential risks included in insurance package A (more information about the insurance can be found here).
  
  

How much does it earn?

The current financing conditions and the possibility of obtaining an investment bonus can be found directly on the Auctions – CashFree Loans page.

How to invest?

You can invest in these loans individually (active CashFree Hypo auctions are available under Investment Opportunities in the CashFree tab) or you can set up / adjust your Auto-Invest for these types of investments.

Besides unbeatable returns, you don’t have to worry about anything else. Simply choose how much you want to invest and optionally select the specific loans you want to participate in. This will cost you only 0.33% of the monthly installment collected (minimum 0.01 EUR) as an investment management fee to Yellow Melon.

If you don’t yet have an investment agreement for investing on Yellow Melon, register HERE