CGM Financial offers an innovative solution to one of the industry’s biggest homeownership hurdle: crowdfunding.
Coming up with down payment money remains one of the top hurdles to homeownership, according to a recent online survey conducted by Harris Poll and commissioned by NerdWallet.
Aside from paying for other debts, down payment which usually costs around 6 to 20 percent of the purchase price of the property, is commonly cited as a reason why 68 percent of Americans don’t own a place of their own.
With skyrocketing home prices and rising interest rates, it’s getting more and more impossible for many to chase their own American dream. It’s a sad reality that few have attempted to draw a solution for.
But those who do certainly capture attention with their seemingly radical yet sensible proposition.
The most recent – and one of the few ones – to do so is mortgage firm CMG Financial who launched a crowdfunding platform specifically designed to allow home buyers to crowdfund their mortgage down payments.
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A modern approach
To ensure that the money they contributed to the crowdfunding campaign is adequately used for the reason stated, contributors can make their gifts conditional. That is, specify that the money can and should only be used for the purchase of a home.
Users of the HomeFundMe platform are incentivized to complete a homebuyer education, or a counseling session. In exchange, they are given an opportunity to receive a grant that can range from $1000 to $2500. After the user completes the counseling, the crowndfunding platform will then match donations at $2 for every dollar raised to the qualified grant limits.
Furthermore, users can leverage life events by connecting HomeFundMe to wedding registries and other platforms.
Not just down payment
Saving for a down payment has been hard for both millennials and Gen Xers due to huge debt amounts they carry, on top of high rent payments. According to the National Association of REALTORS®, 46 percent of millennials have an average student loan debt of $25,000.
CMG Financial and MBA’s Vice Chairman Christopher M. George says that through the platform, buyers will be “able to utilize their own community and network of family and friends to increase the amount they have available for a down payment.”
“At CMG, we believe that the home buying process is a community event. We want more people to recognize that there are various ways to purchase a home and become educated in the home buying process,” he adds.
The HomeFundMe platform is receptive of all homebuyers, whether you already have some saved or need to start from scratch.
About CGM Financial
CMG Financial is a well-capitalized, privately held mortgage-banking firm founded in 1993. The company makes its products and services available to the market through three distinct origination channels including Retail Lending, Wholesale Lending, and Correspondent Lending.
An innovative approach that uses community aid for a noble cause, it’s safe to say CGM Financial’s solution is both a social experiment and an out-of-the-box strategy whose results might surprise the industry.