As part of the globalization drive, or merely a need to expand, some companies establish subsidiaries or branches in other countries or even another state within the same country. When such a situation occurs, the company might need to transfer some of its already tried and tested experienced workers to serve as part of the foundation for the new subsidiary or branch. Where this is the case, the company might offer a relocation mortgage to any affected employee as part of the effort to make the move more attractive to such a person. This is due to many factors that include a reluctance by some employees to leave an area after they might have established themselves there and also due to the costs associated with buying a new home in the new location. This type of mortgage serves the purpose of reducing the financial burden associated with buying a new home by specifically provided some assistance to the employee in the form of the payment for the closing costs of the new house.
Some companies might have their choice of lenders with whom they might have dealt in the past regarding such issues, or they might leave the choice of a lender up to the employee. Finding a lender to engage in a relocation mortgage is not that hard due to the fact that some lenders specialize in the provision of such services. A relocation mortgage is attractive to such lenders since they know that they are dealing with companies that have the resources to settle the accruing debts in a more timely fashion than some individuals can manage.
What usually happens under the mortgage arrangement is that the lender will calculate the closing costs for the mortgage of the home in the new location with a view to sending a bill to the company, rather than expecting the employee to pay such costs. Another advantage that is attached to the mortgage arrangement is the fact that it does not require as much scrutiny as other forms individual mortgage, reducing the length of the process and also reducing the paperwork associated with the process of obtaining the mortgage. The money saved from the process of the relocation mortgage can be used by the employee for other purposes not related to the mortgage.
