Before you can request a LAND mortgage, you will have to approve the Ripio Credit Network’s smart contracts to conduct transactions on your behalf using your MANA and RCN tokens. Open your Account Settings in the upper right corner, and check the two LAND by Mortgage boxes. (You only need MANA to request a mortgage, RCN will convert the MANA you use to the RCN token for you.)
Next, navigate to the parcel that you wish to request a mortgage for. Click Request Mortgage, directly next to the Buy button.
Next, you will have to submit a brief application form including the following details and a deposit of at least 10% of the price of the parcel you wish to buy.
- Amount requested: the amount of MANA that you need for your mortgage.
- Duration: how long (in days) you have to pay off your mortgage at the standard interest rate. Once the duration is reached, you will have to pay the punitory interest rate until the mortgage is paid off or defaulted.
- Payable at: this represents the minimum amount of interest you will pay, regardless of when you pay off your mortgage. For example, if you take out a mortgage lasting 30 days, with a Payable at of 10 days, then you will be charged for at least 10 days of interest (even if you pay off your mortgage within one day of your request).
- Interest rate: the annual interest rate for your mortgage.
- Punitory interest rate: the amount of additional interest you must pay if you do not pay off your mortgage before the duration of your mortgage.
- Request expiration: how long the mortgage will be listed on RCN. If this date is reached and no one fulfills your mortgage request, you will have to request another mortgage.
Once you request your mortgage, it will be published to the RCN network. Remember, so long as your mortgage request is still open on RCN, anyone else may purchase the parcel. A mortgage request does not take a parcel off of the Marketplace until a lender fulfills the mortgage.
Any lender on RCN can supply the funds and fulfill the loan (as long as the parcel in question is still for sale). Once a lender fulfils the loan, the parcel will be transferred to a separate smart contract for the mortgage and will no longer be available on the market for other buyers.
As a borrower, you can then repay the loan by making periodic payments through the Decentraland Marketplace.
If you fail to fully repay the loan, you have up to 7 days after the expiration date to repay your loan. After this period, then your lender may request the mortgage back through the RCN dApp. If your lender requests the mortgage back, you will see a “Defaulted” notice on the parcel page. You will lose the MANA you’ve paid, along with your ability to claim that parcel.
You can see a list of your open mortgages by clicking My Land in the Decentraland Marketplace, and selecting the Mortgages tab.
To make a payment, click Pay in the mortgage’s details page, enter the amount of MANA you want to include in your payment, and click Submit.
Once you have completely paid off your mortgage, you can claim your parcel. Simply navigate to the parcel’s page in the Marketplace, and click Claim Parcel. Now, the parcel is freed from the mortgage smart contract is transferred to your account.