National Family Mortgage, a U.S. marketplace for peer-to-peer mortgage loans, has introduced Caregiver Mortgage, a secured home equity line of credit (HELOC) that is crowdfunded by the homeowner's relatives.
The Caregiver Mortgage enables the homeowner's own family, rather than a bank, to receive tax-free cash borrowed against the home equity.
Institutional reverse mortgage products typically limit consumer choice and do not offer customizable options. Institutional lenders also charge high closing costs, interest rates and annual insurance premiums.
The Caregiver Mortgage, on the other hand, allows each lender to set his or her individual credit line that will contribute to the collective credit offered by all of the participants. This HELOC also allows lenders to make disbursements whenever needed – even daily, if necessary.
The line of credit must be fully paid in the following instances: when the last surviving borrower passes away, the last surviving borrower sells the home, or the term of the credit line ends.
‘The Caregiver Mortgage encourages family participation. Our transparent loan management platform allows lenders to track their disbursements, add notes or receipts, and calculate year-end tax reports. Proper documentation sets clear expectations and prevents future misunderstandings with the IRS or between family members,’ says Timothy Burke, CEO of National Family Mortgage.