For most people, buying a home is one of the most significant milestones of their lives. It’s probably up there with graduating college, getting their first job, and having their first child.
However, as recently as 2014, homeownership dropped to a rate lower than we’d seen in 1994 – with a rate as low as 64%. For households headed by those under the age of 65, today’s homeownership levels are at a near record low since 1982.
Meanwhile, a Pew Research Center has shown that a solid 72% of renters have stated that they’d like to buy their own home in the future.
Why Are These Figures So Low?
Despite many of the US government’s attempts to implement new policies to encourage home ownership, the reality is that many of these have only served to exacerbate inequality.
Most people can’t afford to buy a home outright. As a result, those who want to own their own home have no option but to take out a mortgage. But this itself is rife with potholes.
The Current Issues With Taking Out a Mortgage
Taking out a mortgage is not a decision to be made lightly. Even after serious consideration, there are some significant risks that come along with it. Some of them include:
- Dishonest mortgage brokers
A good, honest broker is an invaluable asset when buying a new home. They will smoothly guide you through the process, making sure you are getting a fair deal and that you avoid the most common mortgage scams. However, a bad broker can be disastrous – and sometimes it can be difficult to tell a bad broker from a good one. Even big name lenders have been accused of cheating their customers out of money.
- Borrowing more than you can afford
For the vast majority of people, a mortgage is the most significant chunk of debt they will ever take on. Many homeowners still owe more on their mortgage than their actual house is worth.
What’s more is that many people get fixated solely on the buying and selling prices of their house – they forget to account for all the time and money spent throughout the process.
- Unexpected taxes
Many homeowners often forget to take into account the taxes they will be required to pay in addition to the interest they are required to pay.
- A higher amount of interest than expected
A mortgage typically lasts for between 20 to 30 years. Since most mortgages take a significant amount of time to be paid off, a higher level of interest is ultimately paid.
Is It Time to Reinvent the Mortgage Industry?
If we’re trying to encourage more people to take out a mortgage as a step to owning their own home, isn’t it about time that we tried to reinvent the mortgage industry?
Homelend is a mortgage crowdfunding platform that is working hard to refresh the archaic process of taking out a mortgage and disrupt the current $31 trillion global market.
It enables borrows to easily apply for a loan, track their application status at all times, and even interact directly with mortgage lenders at any time of their choosing.
The application is a blockchain-based, peer-to-peer mortgage lending platform. It leverages distributed ledger technology (DLT) and smart contracts in order to bring individual borrowers and lenders together. It features a single, end-to-end platform that streamlines and automates the entire mortgage origination process.
The platform aims to serve two major purposes. Firstly, to modernize the outdated mortgage lending system to make it more efficient, cost-effective, and customer-centric. Secondly, and arguably more important, to expand the homeownership opportunities in order to meet the distinct lifestyles and needs of a new generation of borrowers.
Making Mortgages Accessible to Everyone
The bottom line is that if we want more people to take out mortgages, we’re going to have to make mortgages accessible to more people.
With the rise of platforms like Kickstarter and Indiegogo, crowdfunding has become an increasingly reasonable and attractive option over the past few years. If we can use Kickstarter to fund the production of crystal bacon, then surely we can leverage crowdfunding to help people buy a place to live!