Buying a home by availing family loan!
You want to buy a home, and you are a first-time buyer of a house. Most certainly, you may not have with you sufficient funds to fulfill your desire of owing a home. If, however, you have a good circle of friends and a family besides, the matter of buying a home might, perhaps, become simpler. But then, your family and the circle of friends you have, should not only be well placed financially, but should also have the will to help you. Since money and relationship do not always go well with each other, you have to be very careful in handling the matter.
Discover the genuine lender
Though you may have quite a number of friends as well as relatives, only a few of them will have interest in your welfare and may be willing to go all out to help you in the matter of buying a home. You find the right person. Then, you discuss with that person the terms of the loan and arrive at a mutually acceptable agreement. This agreement should mention the interest rate and the period of repayment. Both of you can have a frank and detailed discussion in the matter.
When things are finalized this way, there will be no room for any misunderstanding later. Formal documents are necessary although you avail loans from one of your family members or friends. You may be friends or related to each other. But, in matters of borrowing and lending, it is always better to enter into a formal written agreement pertaining to the loan. In case the okay credit loan is against mortgage of a property, then a mortgage deed may be required too. For guidance in the matter, you can go online or get in touch with book shops where you will get sample documents.
To give a ‘professional touch’ to the document, seeking the help and advice from an experienced person, who is well versed in this line, will be beneficial. A proper plan for repayment will be helpful to have a clear mindset as to the repayments. At times, even getting a loan may be easy; but never is it easy to make prompt repayment of a loan! So, it is advisable for you to plan a monthly budget, which should include provision for repayment of the loan. The repayment should be prompt and it should be on time.
To make things easier, you can give standing instructions to your bankers for necessary transfers, to the lender’s account, every month on the due dates. This will help you to avoid unnecessary anxiety, concerning the repayment. It is suggested by financial counselors that you draft a proper plan to make the repayments on time. However, the plan alone is not enough. You must have the determination to follow the repayment schedule.
You have borrowed the needed funds from your fiends/family members. You have taken into consideration various factors while preparing the monthly budget which has a provision for repayment of the loan. But, is this enough? No, certainly not! You should spare no efforts to see that you are able to ‘stick’ to your budget and also are able to make the regular repayment installments. The repayment should be as per the terms agreed upon in the promissory note. If, for any unexpected reasons, you are unable to make a payment, on time, you should take the first opportunity to contact the person and explain to him the real problem.