It is true that
family always has each other's backs. This can be manifested in a lot of ways.
One of those manifestations is buying a house through a family pledge loan. This loan type is very helpful to a lot of
people who are just starting out as professionals and want to buy a property
but do not have enough money to afford a mortgage.
Through the
assistance of a family member, most likely parents, these individuals will have
the chance to borrow money they need to buy a house. Family members will pledge
or offer support by providing security to the loan, taking away the risk from
the borrower and making the whole application process easier.
This home loan
provides every person the opportunity to buy a house even with bad credit or
cash insufficiency. Through a family pledge individuals will be able to
minimize the risk if borrowing money from lenders. We all know that lenders are
more likely to grant loans to those who do not pose a high risk. With the help
of family members, you will be able to easily get a loan approved.
It works this
way: a family member provides assistance by guaranteeing part of the loan. That
family member can pledge assistance by using his or her property's equity as a
security for the loan being applied. As a result, the borrower will be able to
borrow more and incur less costs.
The benefits of
taking advantage of family home loans include:
•
Being
able to borrow more
•
Minimizing
the risk factor so lenders won't have to be worried about you not being able to
repay the loan
•
Lower
loan to value ratio that can result to elimination of mortgage insurance
•
Lesser
deposit
Family pledge loans are going to be eligible with standard rates. You also have the
power to remove the security when you want.
This type of
home loan is best suited for those who are starting out and want to become
independent. New graduates who are already employed are most likely to be very
adamant about buying their own homes. But since they are just starting out and
do not have huge salaries yet, they need to wait several years before they can
get what they want.
But if they have
family members, like parents, who are willing to lend a helping hand, they do
not have to wait very long.