To borrow using a property deed, one must use the deed as collateral for a loan. The process typically involves securing a mortgage, deed of trust, or home equity line of credit (HELOC). The borrower signs a legal agreement with a lender, allowing the lender to seize the property if payments are missed. Interest rates vary based on creditworthiness and loan terms. Alternatives include home equity loans or peer-to-peer lending, but property deed borrowing offers higher loan amounts and lower rates due to collateral.

This method is favored because collateral reduces lender risk, enabling better terms. According to the Federal Reserve, secured loans like HELOCs have average interest rates 2-3 percentage points lower than unsecured personal loans (2023 data). Additionally, mortgage interest may be tax-deductible, enhancing affordability. The American Bankers Association reports that 68% of homeowners prefer secured loans for their stability, as default risks are mitigated by property value. However, lenders require a minimum credit score (usually 620+) and property valuation, limiting accessibility. For example, a $300,000 property with a 20% equity stake could borrow up to $60,000 at 5-7% annual interest, depending on market conditions. This approach balances risk and accessibility, making it a common strategy for debt financing.