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Beware, mortgage lenders: a new competitor is in the house. It’s not a big bank or business, but the crowd itself, who can soon invest in mortgages through Jungo, an online mortgage crowdfunding platform founded by two guys with big ideas.
Although people will still need the actual bank or mortgage broker to seal the actual deal, Jungo makes it possible for everyone to invest in the mortgages through crowdfunding. This so-called people-to-people mortgage is the next step in the collaborative economy, where online platforms like AirBnB or Uber allow both the supplying and demanding side to gain (financial) advantage with the deals they make with each other.
Jungo aims to be that specific platform the the mortgage sector. According to co-founder Vincent van den Noort, Jungo creates a win-win situation for investors and home buyers: people are able to buy their dream house with the new group of potential investors, while the investors receive a nice return on their investment.
Funding from the crowd doesn’t mean that people can loan more money than the bank will offer them. In other words; more money that they can actually afford. “It’s not our goal to saddle up people with higher debts,” Van den Noort says. “Our aim is that people can receive a more affordable mortgage in a safe and secure way.”
Safety and security are important issues when it comes to mortgages. It’s good news for Jungo, then, that they received an official go-ahead this week from the AFM, the financial services regulatory authority for the Netherlands. It’s a crucial moment for the startup, because the license from the AFM is necessary to make investing in mortgages possible. “We have a complete license to offer and mediate mortgage loans,” says Gerard Looijen, director of Jungo’s Finance, Risk & Operations department.