Different Tips To Secure A First Bond As A First Time Buyer

The global recession has made it increasingly difficult to access a bond

. This applies especially to people who buy a home for the first time. That said, the last months have shown a form of relief in the property industry.

While this is the case the lending criteria are still much more stringent than was the case a number of years ago. Today it is virtually impossible to access a one hundred percent bond. For the most part a potential homebuyer would need to have at least twenty percent of the purchase price as a deposit. This has now caused these people to approach friends or family members to borrow the money for the deposit.

For some, asking people for money from friends and family is not a good option. Though it is not planned, non-payment or late payment may result in family feuds or strife. Misunderstanding about payment terms will have the same effect. Money disputes are one of the leading causes for separating families.

People should always calculate in advance whether they could afford to repay any money borrowed. Mortgage lenders indicate that the primary reason for rejection of loan applications is due to affordability issues. That also placed pressure on lenders to ensure that borrowers can afford to repay their debts.

Lending money from family or friends is no more viable. If the borrower is unable to repay a loan to a bank, they are likely to default on a personal loan too. Feuding will probably ensue, which will be highly stressful for all parties concerned.

A potential solution is where an approved borrower also obtains some money from family to reduce the repayment amount. Interest will be reduced in this way. The financing company will also become more confident in the borrower.

There are certain recommended steps to be taken before asking a family member for money. It is very important to present a viable budget that details how much the person will be able to repay and on which intervals. In the case of asking family for money, one has to be completely transparent with all information supplied.

Unless you are one hundred percent sure that you can afford to borrow money. A lender should expect that they may not be repaid and to lose the money. The bond industry has changed in the last number of years and this is what it has come to. Most lenders employ these general guidelines.

by: Justin Harrison.

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