All In The Family

Nearing retirement? Looking for a way to help your grown children purchase their first home? Discouraged about the low interest rates you are earning on your savings? Take heart. There is a way that you can help your children and double your return on your savings.

All around the country, people are loaning money for home purchases to their children in what are called intra-family mortgages. As many empty nesters reach retirement age, they sell larger homes, many of which are paid off, and downsize to smaller more manageable homes or town homes. Because most Americans have enjoyed steadily rising home prices over the past several years, downsizing frees up a lot of cash. Instead of 1 ½ to 2% interest on savings, many people are realizing 4-5% percent by acting as a mortgage company for their grown children.

There are some caveats. First, you need to get everything in writing. The one thing you don’t want to have happen is a strained relationship with family due to a misunderstanding. Fortunately there is a company that specializes in intra-family mortgages and loans. You can visit their website here.

CircleLending provides the necessary structure to make an interfamily mortgage a win-win situation. CircleLending will create a promissory note and mortgage. File with the appropriate governmental agency. Create a loan amortization schedule and handle all payments. They manage the entire process so you don’t have to become a bank or collection agency.

Intra-family mortgages are just one more way that individuals can earn a better interest rate on their money and help a family member at the same time.