A house often becomes the last hope for many people when facing financial difficulties, especially during uncertain economic conditions. However, is selling the house or applying for financing with a home certificate as collateral truly the best choice?
The decision to sell or collateralize your house to obtain funds is not something to be taken lightly. To avoid making a careless decision, consider the most relevant option for your situation by reviewing the explanations below.
Things to Consider Before Selling or Applying for Home-Collateral Financing
Unsure whether selling or applying for financing with a house certificate as collateral is the right step? Here are several important factors to evaluate before making a final decision.
1. Calculate Your Financial Needs
Determine exactly how much funding you need. The amount of money obtained from selling a house is different from applying for a loan. When you sell a house, the selling price can be determined beforehand or based on market value.
Meanwhile, financing with a home certificate at financial institutions generally ranges from 70–80% of the collateral value. For example, if your house is valued at Rp800 million, the maximum funding you can receive is around Rp560–Rp640 million.
Typically, the financing process is faster than selling a house, as long as the property’s location and condition meet requirements. However, if you plan to sell the house, it is recommended to use a professional property agent to assist with tasks such as:
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Handling legal documents
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Taking photos of the house
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Helping determine the most accurate selling price
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Listing the property across multiple marketing channels, and more
2. Land and Property Ownership Status
Be mindful of the legal status of ownership when deciding. Selling a house or land means transferring ownership rights to another party. Once the transaction is complete and you receive payment, you no longer have any right to the property.
On the other hand, applying for home-collateral financing does not transfer ownership. Once the full loan is repaid, you regain complete ownership of the house.
However, if your financial condition worsens and you are unable to make payments, the property can be seized. This is why the debt-to-income ratio should ideally not exceed 30% of monthly income. You can evaluate both options based on this factor.
3. Document Requirements
Selling a house and applying for home-collateral financing involve different processes and documentation. When selling a house, you must prepare several documents, including:
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Certificate of Ownership (SHM)
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Building Permit (IMB)
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Land and Building Tax (PBB)
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Sales and Purchase Deed (AJB)
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Proof of bill payments and other supporting documents
For financing with a home certificate, documents typically include: application form, copy of KTP, Family Card (KK), SHM, NPWP, and others (depending on the financial institution).
Tips Before Selling or Applying for Home-Collateral Financing
In addition to the considerations above, here are several tips that may help before selling or applying for financing with a home certificate:
1. Evaluate Funding Needs in Detail
As explained earlier, understanding how much you need is essential. Create a detailed list of expenses and categorize them by priority to determine which needs are urgent, essential, or optional.
Then calculate the total cost and include a backup allocation of around 10–15% for unexpected expenses. This ensures the funding amount is accurate — neither lacking nor excessive.
2. Prepare a Solid Business Plan
If the purpose of financing is for business, preparing a comprehensive business plan is crucial — including vision, mission, market analysis, marketing strategy, financial plan, and execution plan. This will help convince financial institutions or potential investors that your business is feasible.
Without a proper business plan, funding from selling or collateralizing a home certificate may easily be wasted due to poorly planned usage.
3. Look for Other Funding Alternatives
There are many ways to obtain financial support — not only selling or collateralizing a house. Other alternatives may include:
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Loans from family, relatives, or friends
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Funding programs from cooperatives or government
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Business partnerships
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Crowdfunding, and more
4. Conduct a Risk Analysis
Before deciding, conduct a risk analysis for both options. This helps you assess potential worst-case scenarios and prepare mitigation steps.
5. Consider Psychological and Emotional Factors
When under pressure, emotions can affect decision making and lead to mistakes. To avoid this:
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Discuss it with family or a financial advisor
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Give yourself time before finalizing a decision
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Research available options and identify the pros and cons of each
6. Improve Your Financial Literacy
Deepen your understanding of financial products to make wiser decisions. You can learn through official educational programs, financial articles, online videos, or business podcasts. Topics may include financial reports, debt management, capital calculation, and profit projection.
Requirements & How to Apply for Home-Collateral Financing
If you choose financing, there are many institutions to consider — including BFI Finance. The documents required to apply for home-collateral financing at BFI Finance include:
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ID card (KTP) of the applicant and spouse (if married)
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Family Card (KK)
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Taxpayer Identification Number (NPWP)
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Marriage Book or Marriage Certificate (for married applicants)
Applicant eligibility criteria include:
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Indonesian citizen
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21–65 years old
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Marital status: single, married, or divorced
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Residence status: own home, spouse’s home, family’s home, or annual rental
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Minimum employment period: 2 years for employees, 2 years in operation for entrepreneurs
Property eligibility requirements:
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Occupied and permanent building
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Located in a housing complex or residential area
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Not under renovation
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Road access wide enough for 1 motorcycle and 1 car
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Not near cemeteries, public facilities, or high-voltage power line towers
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Not currently listed for sale
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Collateral accepted: SHM/SHGB certificates under the name of applicant, spouse, or biological parents (parents must still be alive)
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Eligible locations: Jabodetabek, Balikpapan, Medan, Denpasar, Malang, Surabaya, and Sidoarjo
Steps to apply for home-collateral financing through BFI Finance:
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Fill out the online form and prepare personal and collateral data
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Call Center will contact you for loan consultation and processing schedule
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Property survey and validation will be conducted
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After approval, funds will be disbursed directly into the applicant’s account
That is an explanation of whether selling or applying for home-collateral financing is the best option. In essence, both options are major financial decisions. If you need fast funds without losing ownership of your asset, then financing with a home certificate can be the ideal solution.
BFI Finance provides home, shop-house, and commercial-building certificate collateral financing with funding amounts ranging from Rp300 million to Rp5 billion.
BFI Finance also offers competitive interest rates, high disbursement without deductions, and flexible repayment terms of 12–60 months (up to 5 years). Financing with BPKB Motorcycle and BPKB Car collateral is also available.
All transactions are carried out transparently and securely, as BFI Finance is officially licensed and supervised by the Financial Services Authority (OJK). So, what are you waiting for? Get the funds you need now — because #SelaluAdaJalan with BFI Finance!
