The Bank of Mum and Dad. It’s easy to find, the staff always know your name and their rates can’t be beaten!
Well, that’s when you’re borrowing money to pay a mobile phone bill. But what about when you want to put in an application to borrow some serious cash, like enough to put a dent in a house price?
While there are plenty of options for low deposit home loans, it’s not always that easy to get approved for one. Borrowing from family and friends is often an easy solution, but it’s best to cover your borrowing-basics so everyone is protected in the transaction. To get you sorted, read over the Do’s and Don’ts of DIY Home Finance below.
It’s the right thing to do, as the lender is potentially losing interest they could have made on the cash if they had it invested. Including interest in the loan also gives the borrower more incentive to pay the money back sooner rather than later.
Get It In Writing
Discuss the terms of the loan. What will the minimum regular payment be? What happens if a payment is missed? Include any potential issues which could arise and type up suggested solutions.
Make Sure You Can Pay It Back
Unlike a bank, your mum, dad or mate won’t be running a credit check on you. Make sure you thoroughly work out your future budget, leaving room for paying back regular amounts to your lender.
Splash the Cash
If you’re lucky enough to have a friend or family member lend you money for your new home, be gracious and thankful. Think now’s a good time to buy a TV or car? Not cool.
If someone kindly offers/agrees to lend you an amount of money, do not ask for more. Same goes for asking for a lower interest rate! The person lending you money has likely offered an amount they can afford to lose, so accept it graciously.
Be Business Buddies (only)
Beware of your relationship becoming a financial transaction. Adding ‘borrower’ and ‘lender’ to any relationship will change the dynamic, but make sure you maintain your usual relationship and don’t let every conversation be all about business.
The Easystart Family has your home finance sorted.
There are stacks of reasons why Easystart is the go-to choice of affordable home builders Perth first home buyers are raving about!
The team at Easystart make the building process especially easy for first home buyers. Whether you’re thinking about budget home builders (Perth) or low deposit home loans, they’ll put your mind at ease with swift solutions.
Now you may be thinking; ‘can I get home finance?’