Crowdfunding is an in-demand tool for paying for various ventures in New York and elsewhere these days. However, recently, this technology has become increasingly popular among aspiring homebuyers. They are using crowdfunding to help them in their residential real estate transactions — specifically, to cover their down payments.
The top challenge that millennials face when it comes to purchasing a home is being able to afford a down payment. However, with crowdsourcing, they can finally generate the down payments they need and start enjoying the financial benefits of homeownership. On their crowdfunding pages, users can explain their journeys toward homeownership and could even include video or photos to make even more of a personal connection with their readers.
A particularly popular platform is HomeFundMe. This platform is the first one to receive the backing of Freddie Mac and Fannie Mae, giants in the mortgage industry. The benefit of crowdfunding is that it eliminates some of the red tape that comes with receiving traditional monetary gifts for down payments. Mortgage lenders oftentimes require the recipient of such a gift to present a letter written by the giver that explains that the funds are a gift instead of a loan and that no strings are attached. However, an online platform used for fundraising purposes may make this extra step unnecessary.
Coming up with the down payment is not the only hurdle with which home seekers must contend. They must also navigate the legal aspects of residential real estate transactions. Understandably, this can be confusing no matter how many times a person has purchased a home. Fortunately, an attorney can provide the guidance that aspiring home buyers need to make their homeownership dreams come true in New York.
Source: realtor.com, “Should Buyers Crowdfund Their Way Into Homeownership?“, Young Ha, May 11, 2018