CashFree Real Estate Loan

An investment into loans secured by a first-rank lien recorded directly on the title deed. In addition to strong security, the investment offers attractive returns and the possibility of obtaining an investment bonus.

How does it work?

The CashFree Real Estate Loan is intended for housing finance. It can replace a bank mortgage or act as a bridge loan that provides funds until the client settles their new housing situation.To minimize the borrower’s monthly expenses, the repayment amount can be calculated over a 30-year period, but no longer than until the borrower turns 65. The maturity for investors, however, is a maximum of 3 to 5 years, when the loan is refinanced (part of the principal is repaid in the last installment during refinancing with a new loan). Applicants may also choose to pay interest only during the first year—just like with the CashFree Housing product.

If an investor wishes to exit earlier, they can sell their investment at any time on our Secondary Market.

Real estate collateral

In addition to standard requirements regarding income, expenses, and applicant quality, a condition for obtaining the loan is owning a property free of liens. This property serves as collateral, and the lien in favor of Yellow Melon investors is recorded directly on the title deed in first position.

The maximum loan amount depends on the value of the property. Applicants must provide a current appraisal. We currently set a maximum loan limit of 60% of the property value (LTV – loan to value). The property's value, LTV ratio, location, and photos are available to investors in the auction detail.

How else is your investment protected?

In addition to the lien on the property, we further protect your investment through the following mechanisms:

• Verified value and quality of the property: A current property appraisal is required. Loans are never financed up to full property value, as a minimum valuation buffer is always applied. The appraisal value and LTV ratio are listed in the financing auction.
• Borrower creditworthiness check: Even though the loan is secured by property, every borrower undergoes a full-quality financial assessment at Yellow Melon, verifying income, expenses, repayment ability, and all essential indicators ensuring the quality of the application.
• Sufficient debt capacity: For each borrower, we verify their ability to repay all obligations—including the Yellow Melon loan—with enough reserve to withstand potential income drops.
• Greater motivation for financial discipline: The borrower knows that if they fail to repay the Yellow Melon loan, we will take steps that may lead to loan acceleration and execution of the lien. 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 ability to repay at minimum all potential risks included in insurance package A (more information about the insurance is available here).
• Property insurance with assignment: The property serving as collateral must be insured, and the insurance payout up to the loan amount is assigned in favor of Yellow Melon (the investors).
  
  

How much does it earn?

The interest rate depends on the loan maturity. Banks use a similar approach when fixing mortgage conditions. Current financing terms and the possibility of obtaining an investment bonus are available directly on the Auctions – CashFree Loans page.

How to invest?

You can invest in these loans individually (active CashFree Real Estate requests are available in the Investment Opportunities section on the Auctions page under CashFree), or 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, if you wish, select the specific loans you want to participate in. This will cost you only 0.33% of the monthly repayment collected (minimum 0.01 EUR) as an investment management fee to Yellow Melon.

If you do not yet have an investment agreement for investing on Yellow Melon, register HERE