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First Home Buyers Worry About Finances Even With The Help of BOMAD

First home buyers

A new survey from the Canada Mortgage and Housing Corporation (CMHC) shows that first home buyers still worry about their finances even after receiving support from family for a down payment on a home. 18% of first time home buyers shared that their down payment included a gift from family. These individuals who’ve received help from family further said they felt less comfortable with their mortgage debt and were unsure of where to turn if ever in financial trouble.

The Bank of Mum and Dad are a large contributor to the property market and are a significant lender to first-time buyers. However, can BOMAD really make a difference when there’s a broken housing market and now a change in mortgage rules?

Credit: CBC News

Source: www.cbc.ca

 

 

Lending £6.5 billion: The Bank of Mum and Dad

Lending £6.5 billion: The Bank of Mum and Dad

Overall, in 2017, the Bank of Mum and Dad is expected to be one of the greatest lenders in the United Kingdom, lending £6.5 billion. What’s the most popular reason for lending BOMAD lending their children money you ask? The Bank of Mum and Dad continues to financially support their children in buying their first home, as first-time buyers continue to struggle to save for a home. It is believed this struggle of Generations X and Y is a result of intergenerational inequality and the ‘broken housing market’.

Research from the Legal & General and economic consultancy Cebr has reported a 30% increase in lending, from £5 billion in 2016. Highlighting that parents will now be involved in 25% of the UK’s property transactions, funding up to £75 billion in property purchases in 2017.

Credit: Nick Fletcher

Source: The Guardian

 

 

Relationship Lending 101

Relationship lending

Relationship Lending can be a sticky mess. So here’s a guide for all the people that have been taken advantage of for their generosity in lending money.

This blog pretty much came about because of a situation I was put in because a friend avoided paying me back the money she owed me. She would use every excuse imaginable and would simply not reply to any message if it concerned the loan.

So I put it to you, have you lent your friend some money and in the end it reached that point where you’ve had to chase it up so much you’ve just given up?

My issue with Relationship Lending

Let’s think about it rationally. The first point I’d like to make is that it’s not just you, things like this happen to a lot of people and it’s just life, or more like one rotten individual that decides to take advantage of you. Also, relationship lending is a constantly increasing way of loaning and borrowing money, and with no formal documentation, situations like mine constantly occur. 

I know people will say it’s a good learning experience, but heck, it shouldn’t be seen that way. As a child, I was brought up to repay or give back what I borrowed. It’s just common decency. Where I’m from it’s definitely not a thing to avoid paying someone back. It’s not just rude, but that person is being selfish and potentially risking a relationship.

Let’s face it, it is an experience we learn from. As we hear and learn about experiences like this we learn to be a bit more careful with our money and whom we lend it to. These next few steps are what I’ve come up with that help me loan between family and friends in the safest and most manageable way.

Look at their history

If it’s a friend you’re lending to, have a solid think about past events. Specifically think about situations where splitting bills, buying rounds and offering to pay have arisen. For example, if you’ve offered to pay for something of theirs do they offer to split it or even repay you, or do they just let you pay it? If you buy rounds do they actually buy ‘the next round’? Do they offer to pay for you when you go places?

Another key aspect of this is to consider how close you and this person are. Are they someone you enjoy spending time with and constantly catch up with? Maybe they’re the kind of person that doesn’t stay in touch and waits for you to contact them. Maybe they’re a family member like a parent or sibling. Or maybe they’re a distant European cousin saying they’ve got cancer and need help…..seems legit right!

Look who’s asking!

Are they asking or are you offering? Always consider who’s initiating the loan. I’m not saying don’t lend to people that are asking, however, suss out the importance of the loan to them and the reasoning for the initiation.

Let’s put it this way, if someone’s whining to you about needing money and they’re obviously hinting at you loaning the money to them, then maybe it’s an ‘enter at your own risk’ situation.

Some people may approach you in a reasonable manner. For example, sit you down, ask for a loan and offer repayment details straight off. They’ve obviously thought about it, really need the loan and want to prove to you they can be trusted.

If someone you’re friends with but don’t see often asks for a loan, to me, I can see red lights flashing. Maybe they’re a genuine person and simply trust you over anyone else, but be sure if you do progress you have other methods (listed below) in place to make sure it’s repaid.

I’m INTEREST-ed

Let’s put it this way if they honestly need the money and have every intention of repaying the money then they won’t mind if you charge an interest rate or even ask for some cash on top of the loan for agreeing.

Personally, I don’t use interest as a way to make money off someone in need, however, it’s more of a security mechanism for me. By them agreeing to the interest/interest rate they’re saying, I need the money and this interest is an assurance for the lender.

Document it!

Our society is constantly becoming more tech savvy, so it doesn’t surprise me that there’s an exponential growth in fintech (financial technology). One in particular, that I would definitely recommend is credi.com!

When I started working at Credi and understood the platform and thinking behind it, I realised that I’d never make this mistake again. Signing up for a Credi account is simple and it’s FREE! It’s a great little tool that helps to make relationship lending formal, safe and manageable. The platform even has adaptive and unique features such as E-signing, repayment schedules, email & SMS notifications, interest rates, negotiation and much more.

 

With these key steps, I find relationship lending a much easier and less stressful process. I’m constantly lending to my siblings and now that I follow my own little guide I no longer have to chase people up or have arguments surrounding unpaid loans.

I hope these steps on relationship lending help you lend and borrow from friends and family.

 

Becoming your own personal loan specialist

Personal loan specialist

What if I told you there was a way to get a little more money out of your parents. That there’s a perfect way to show them that you’re responsible, reliable and financially savvy – and, well, become your own personal loan specialist!

Just like every person these days likes to retort ‘google it’, I’ll just say to you #CrediMe!

What’s Credi? Well, have no fear, cos I’m here to give you the insider on the little financial technology (fintech) company I call home.

Credi.com, a vital piece of fintech, is one of the fastest growing lending platforms in Australia. We’re an online platform that helps all you millennials and the ‘Bank of mum and dad’ (BOMAD), set up a loan online, document the details, create a repayment schedule, and formalise everything with an agreement and E-signing component. Our fintech platform has already helped hundreds of Australian businesses, friends and families formalise their loans and then manage them – protecting their relationships, avoiding disagreements.

So why not be your own personal loan specialist and set up a loan today. Just add your details, suss out your own repayment details and negotiate the loan like a boss.

Because hey, if Tim Gurner can get his little old grandpa to give him a $34,000 ‘kickstarter’ and become a millionaire, surely we can get a smidge from our parents.

So let’s prove the ‘Bank of Mum and Dad’ wrong and show them we got our s**t together. Well, together enough to write in a few details into a platform and in turn get more money to pursue the beautiful things in life….such as that Contiki trip to Europe that’s been on your mind. They might even be so impressed by you making it a formal agreement that they may forgive the loan.

 

 

 

Am I doing it right? The struggles of ‘Adulting’

Adulting

You may have heard people use the term Adulting before. When my generation usually uses it we refer to growing up, becoming responsible and taking our rightful place within society. However, there is definitely a whole more to this term and I’m typing this blog as we speak to explain to the struggle of ‘adulting’.

Adulting is the term we use when we start to get our s**t together. Once the studying is done, this is where the BIG step to becoming an adult begins. It’s the times where we discover there’s a new expense or payment we had no idea of exists and that our parents are no longer paying for. It’s for the times when we have to get ourselves out of our own sticky messes, work proper hours and pay for our own necessities to life – rent and bills being a couple. Adulting is the limbo state where we go from being a young adult to a somewhat-contributor-to-society-that-pays-minimal-tax.

But let’s face it, sometimes life gets tough and taking the step to being an adult is more of a leap, off a rock, that’s on a cliff, thousands of feet high. So there shouldn’t ever be any shame if we have to resort to going to the ‘Bank of Mum and Dad’. Right? Well if you have no intention of paying them back, or even plan to pay it back as slowly as possible, then sure it’s probably not going to be a fun experience. BUT, if you show them you can manage your finances, make reasonable repayments periodically and negotiate terms, then why the heck not!

That’s where this sweet new fintech (which I’ve recently discovered means financial technology) called Credi comes in. Think of an online platform that allows you to formalise loans and then manage them. An awesome website where you can create, negotiate and accept loan agreements with people you know- like good old ma’ and pa’. It’s even got fancy pants features like repayment schedules, interest options, SMS and email notifications, Esigning, negotiating features and SAH MUCH MORE!

Credi doesn’t just help you manage your loans on your own, it protects relationships and helps you avoid disagreements. Simply put, “it’s changing the way we lend to each other”.

So let’s put it this way, adulting is hard and let’s be honest it’s a lot harder than it uses to be. So I think an important step to becoming an adult is to take baby steps- instead of a leap- and hey those steps may include borrowing money. Loans are great and all but if your parents are financially stable enough surely there’s a way to work something out.

So don’t be too hard on yourself, work hard and have ambitions for the future but most importantly of all, enjoy your life. We need money to pay for necessities and things in life, but we should let it consume us. And hey, when the going gets tough, our parents will always be around….and so will Credi- the platform that will help eliminate the nasties that come with loaning from family and friends.