The trouble with banks (or one of the many troubles with banks when it comes to property investment) is that they put on a smiley face when they want your business, but have no qualms about riding roughshod over you when it suits them.
Thousands of property investor borrowers with the Bank of Ireland found this out to their cost yesterday, when they saw their tracker rate mortgages double overnight.
Rates for buy-to-let and some residential customers who are currently paying 2.25% will rise to BBR plus 4.49% in May. Many regard this as showing a blatant disregard for their customers.
The Trouble With Banks and Small Print
According to a letter sent to the bank’s customers, the loan agreement has a special condition (no doubt hidden in the small print no one reads) which allows them to change the tracker differential for a number of valid reasons.
Many mortgage agreements also (unbeknownst to many borrowers) have clauses allowing the bank to call in the loan at any time subject to certain conditions.
Avoid Trouble With Banks With Property Crowdfunding
It’s for reasons like this that we at The House Crowd wanted to create a different wholly transparent business model for property investment enabling both us and our investors to profit without being at the mercy of banks.
Free from the bind of bank finance and mortgages, investors in property crowdfunding can avoid trouble with banks. With as little as £1,000 they can own a share in property, benefit from potentially high returns, and put in significantly less than were they to invest in a whole property themselves.
The transparency and honesty of property crowdfunding platforms like The House Crowd are key reasons why people are slowly moving away from traditional property investment models, where there is so much risk from unscrupulous banks and mortgage lenders.
Whilst there is risk associated with any form of property investment, we believe it’s more straightforward to weather those risks with the crowdfunding model.
If you want to find out more about avoiding trouble with banks and instead exploring the new property crowdfunding model, we can help. Simply register on our site for more information about getting started, with no demands to do so straightaway.
You can also view our current property investment opportunities by clicking below: