A Church Mortgage can be a real and creative way of obtaining funding for your church. As an alternative to the traditional loan, a Church Mortgage is like borrowing against the value of your church’s property rather than borrowing from a bank with interest on top of more debt. It can be used to purchase or build a new church building, add on space, or remodel part/all of the existing facilities. In some states, these mortgages are referred to as “land trust deeds,” although they have many more benefits, including being non-recourse. This means that if you default on payments, then all they can do is repossess the building and sell it without going after anything else you own, such as cars, homes, etc.! Of course, you will still have a debt obligation, but it will be a lot less than a bank would require.
How To Get a Church Mortgage?
In order to obtain a church mortgage, you must find someone willing to provide the financing for your project. This is done by finding an investor qualified to fund this type of lending. You can try contacting various banking institutions or tax-exempt organizations such as insurance companies, pension funds, and state agencies that are involved in funding projects like this one. Another place to look would be with investors looking for income-producing instruments just like these types of mortgages. They invest their money into properties where they can charge interest payments instead of repaying the investment amount over time.
Even though many qualified investors are out there, you must be careful to deal with reputable ones, or your creditworthiness can be damaged. You should also ensure that the investor agrees to set up a Church Mortgage for you and is willing to provide all required documentation.
What Will My Funds Used For?
Once you have found an investor who will lend you money for this project, they will need a clear understanding of what you plan on doing with those funds. In order for an institution such as insurance companies, pension funds, and banks to loan money on commercial properties to take the risk of funding a church mortgage, they need an idea and final plans before any agreement is signed between them. Your investor might have a list of questions for you to address before they commit to funding your project. They also need to know the square footage of your building, how many seats are in your sanctuary, and where things like the coffee bar are located. The more information you can provide them with upfront, the better chance you have at winning their investment funds.
Church mortgages can be a choice for churches looking for less traditional methods of acquiring funding beyond taking out loans from banks or borrowing money from other sources such as relatives or members of the church. However, these can be large ticket items, so it is important to talk with various investors who specialize in this type of lending first instead of just jumping into something without understanding the pros and cons involved.