The Real Reason Many Choose Mortgage Takeover Properties

Mortgage takeover properties remain popular among some people as they are considered cheaper than market prices.

However, behind the surge in mortgage takeover transactions, there are several factors causing owners to sell before loan repayment is complete.

According to Bambang Ekajaya, Deputy Chairman of the Indonesian Real Estate Developers Association (DPP REI), there are two main reasons why borrowers sell before the loan term ends.

‘Difficulty in continuing payments due to inability to meet installments means they have to sell quickly before the bank repossesses, so the offered price is below market value,’ Bambang said.

He added that this situation often attracts buyers because mortgage takeover properties are generally cheaper than standard properties.

Bambang explained that some cases occur when promised developer facilities, such as neighbourhood roads, drainage, and other basic infrastructure, are not built.

This leaves consumers feeling wronged and opting to sell via the mortgage takeover scheme.

‘This is a type of property that potential buyers should avoid,’ Bambang stated.

Nevertheless, he noted that mortgage takeover properties can still offer benefits if handled carefully.

One advantage is the legal validity, as the Property Ownership Certificate (SHM) and Building Construction Permit (PBG) are typically complete, being required for bank loan agreements.

Additionally, the units are usually completed and partially renovated, making them relatively ready to occupy. Prices tend to be lower as sellers need quick funds.

Bambang also warned buyers to conduct transactions directly through the bank and avoid private deals due to fraud risks.

‘Check all outstanding obligations and promptly transfer the mortgage and title deed to ensure safety for the buyer,’ he said.