Is it Alright to ask the Family to help Financially to Purchase a Home?
Feb 04, 2020 Home Trading Steps
When it comes to purchasing a house, it is better to ask your closest family and friends to help you out financially to complete the purchase. The advantage of the same is that one does not have to feel burdened by the huge debt of home loan that one has to take from the banks to purchase a property. With the prices of properties soaring higher and higher every day, it isn't very easy for the homebuyers to fund the purchase by themselves.
However, if you do not show sincerity in returning the borrowed money to your friends or relatives, you may end up running your relationship. Let us discuss the possible scenarios in which the decision to ask the family for financial help can turn bad.
Case I:
Let us take for example that you and your spouse took home loan as a co-applicant for the home loan and while your monthly salary went to pay the home loan and your partner's to run the house. If you and your spouse end up parting ways in future, the property dispute can take a tough road if the contribution for a down payment is not mentioned at the time of purchase.
Case II:
If your father helped in paying the down payment for the home loan of your property, then your sibling can claim their share on the property as their father paid the down payment.
Case III:
If you have taken a home loan from your closest friend and due to financial issues, you fail to make the payments on time. This can sour your friendship as well.
The above cases are the example of the circumstances that can go wrong, and it does not mean that one should not take help from their family and friends to purchase the house. Taking a loan from near and dear ones, come with many benefits:
However, if you do not show sincerity in returning the borrowed money to your friends or relatives, you may end up running your relationship. Let us discuss the possible scenarios in which the decision to ask the family for financial help can turn bad.
Case I:
Let us take for example that you and your spouse took home loan as a co-applicant for the home loan and while your monthly salary went to pay the home loan and your partner's to run the house. If you and your spouse end up parting ways in future, the property dispute can take a tough road if the contribution for a down payment is not mentioned at the time of purchase.
Case II:
If your father helped in paying the down payment for the home loan of your property, then your sibling can claim their share on the property as their father paid the down payment.
Case III:
If you have taken a home loan from your closest friend and due to financial issues, you fail to make the payments on time. This can sour your friendship as well.
The above cases are the example of the circumstances that can go wrong, and it does not mean that one should not take help from their family and friends to purchase the house. Taking a loan from near and dear ones, come with many benefits:
- You will end up paying the exact amount you take the home loan for.
- There is very little paperwork involved.
- The process of getting money is much easier and faster.
However, one must also follow some steps to make sure that the loan from friends and family do not turn into a bad experience.
- Even though there is no need for a formal process when taking a home loan from friends and family, it is advised that one must try to keep things formal when taking the money. It is also a good idea to lay down the agreement between the people.
- When lending you a large sum of money, your family will expect you to extend the same courtesy in the time of their need. Make sure you have enough savings if such a day comes.
- When taking money from friends, it is extremely important to stick to the deadline to pay the part of your payment to avoid the relationship becoming sour.
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