Is it a bad idea to use peer-to-peer lending to purchase a home?

Discussion in Mortgage & House Payments started by AZ Athena • Jun 22, 2014.

  1. AZ Athena

    AZ AthenaNew Member

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    If you can't qualify for a traditional home mortgage, but you can qualify for one using a peer-to-peer lending program, is there a downside to going with the peer-to-peer?
     
  2. Jessi

    Jessi<a href="http://www.quirkycookery.com">QuirkyCooke

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    The downside is that usually the interest rates are higher. This means paying more overall.

    You may also be more limited by term lengths, too. For example, a regular mortgage can normally be set to be paid off over 30 years. Peer-to-peer lending programs don't have options that long. So if the house is cheap and you think you'll be able to pay for it entirely within a few years, then it's worth looking into.
     
  3. Denis Hard

    Denis HardWell-Known Member

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    Jessi is right. Peer-to-peer groups lending only offer financial help on a short term basis and I doubt they'll be willing to furnish the sort of money that can be used to buy a home unless they'd consider it as an investment which can be liquidated fast should you default on payment. It's not worth it in my opinion.