Crowdfunding has transformed the way people borrow and lend money. After leaving an impact on the business ecosystem, it has progressed to touch the real estate sector. With the same, it is now possible for people to invest in real estate via crowdfunding platforms and raise money to purchase a home.
These days, millennials want to become homeowners but they may not be able to afford the down payment, which they have to pay for it. The reasons for the same are many such as student loan debt, recession and more leaving them with little savings and meagre hopes of owning a house. And, the trend of crowdfunding mortgage lets them gather funds for the down payment of their dream home.
Kim Opdam and Ivo van Kampen are among the trendsetters. They have entered into their dream home in Leiden by purchasing it with crowdfunding mortgage. Regarding this, van Kampen said, “We are delighted with our new home and the innovative way we have arranged the mortgage. Thanks to 110 crowdfunders we now have the most affordable mortgage, while they make a nice return. ”
This was possible from Jungo, a crowd-mortgage lender. Earlier this year, a stake of Dutch fintech startup Jungo was acquired by Aegon. In fact, this is the first crowdfunding mortgage after the collaboration. So, here we have come up with some facts about crowdfunding mortgage offered by the Dutch startup.
Investors get a good return
Jungo’s crowdfunding mortgage lets anyone become a crowd investor in mortgages. They can invest up to 20% of the mortgage via crowdfunding an earn a good return of 2.8% per year for a period of eight years. And, 80% of the mortgage amount is funded by Aegon.
Investors will receive a monthly interest and repayment on the total investment until the amount is fully repaid after a period of eight years. They can reinvest the monthly investment and repayment in other campaigns as well.
Adheres to Mortgage Financing Code of Conduct
It is an investment option associated with a limited risk and a good return. Basically, Jungo investors get access to all the campaigns, read the stories and view the details. This helps them decide who they want to invest in. It is up to the to co-finance the crowdfunding mortgage of a family memory or an unknown person.
Jungo makes sure that all the home buyers seeking the mortgage meet the stringent requirements and adhere to the Mortgage Financing Code of Conduct (GHF). And, the crowd investors will be protected by the Investment Protector. If a homeowner is unable to repay on a temporary basis, the Investment Protection Officer will take the payment to the crowd until the balance is sufficient.
It’s a win-win situation
Jungo’s crowdfunding mortgage is also a win-win mortgage solution. It lets the smart investors and enthusiastic home buyers meet each other in partnership with Aegon. While the investors get a healthy return at a low risk, the home buyers can save a few thousand euros in the process of purchasing a house.
Buyers can get benefits such as automatic interest rate reduction and the ability to pay extra without any limitation. This way, they can pay much lower monthly payments in the future.
Regarding the first crowdfunding mortgage, Vincent van den Noort, co-founder of Jungo said “We thus provide a simple and very certainly advantageous mortgage to which both the home buyer benefits if the investor. Meanwhile, hundreds of investors have already been reported in Jungo to invest in the future of crowdfunding mortgages.”
He added, “Besides these investors can family and friends of homebuyers are involved and invest in their mortgage. So they can work together to ensure that the mortgage becomes even cheaper. We apply for the grant of a mortgage just the current acceptance criteria.”
Financial Advisor Wieringeraak Rutger Freek, Mortgage Voorhout closed the first crowdfunding mortgage for Opdam and Van Kampen. He said, “It was high time that crowdfunding is also possible to purchase a home. The crowdfunding campaign was swift and within ten days around. I expect this innovative mortgage with a keen interest for the buyer and appears to be a nice return for the investor, the future for many a good choice.”
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