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What Mistakes to Avoid When Seeking Out Church Mortgages?

Applying for a mortgage can become stressful if you fail to research thoroughly and plan smartly. A church loan, for instance, is a significant financial commitment. Without careful consideration, putting your ministry’s future at stake is a considerable risk, not worth taking. Taking church mortgages without checking whether your ministry can afford it or not, has negative repercussions on all concerned.

When it comes to finances, church authorities often mismanage their monetary resources resulting in financial instability. Some of these errors include:

Taking on Excessive Debt

Getting into a cycle of excessive debt forbids you from expanding your ministry and paying your staff.

Drafting Impractical Budgets

Drafting budgets on faith instead of taking the church’s past performance into account will not help you cater for unanticipated expenditures.

Failing To Preserve Valuable Relationships

Not cultivating fruitful relationships with those who contribute maximum to the church’s kitty makes you lose potential donations.

Underestimating the Value of Cash Reserves

Not creating sufficient cash reserves and sometimes failing to utilize the church’s financial resources to promote your ministry is not advisable.

Closing Channels of Communication

Failing to transparently communicate with your congregation about financial dealings involving their donations is not fair. They have a right to know how you are putting their funds to use. 

When seeking out church mortgages, refrain from making these common mistakes as listed here:

Partnering With Agencies of Disrepute

The agency you partner with for a church loan must understand your vision and genuinely guide you in the right direction. Frequently communicate with their relevant representatives to assess how far you can rely on them from a long-term perspective.

Never take financial matters lightly, especially when you take a loan and commit to a stipulated duration. Implicitly trust only those agencies and individuals who have the church’s interest at heart and display the same by their actions.

Applying For a Loan without Adequate Preparations

If you are operating your church from a rented facility, ignore the urge to build your facility. The latter is not limited to merely purchasing a piece of land to build a structure. There are a host of expenses involved, like maintenance, insurance, and other costs that need careful consideration.

Lending agencies are not always willing to negotiate terms that favor the church’s interests. Your landlord may be more likely to consider selling off the same property to church authorities who prove to be good tenants.

Not Undertaking Budget Evaluation

Consistently reviewing your church budget allows you to assess the funds at your disposal. If you find it challenging to regularly undertake this evaluation exercise, delegate this task to a responsible and knowledgeable individual.

Not adopting healthy practices for budgeting and accounting prevents your church from achieving financial stability. Without such a sturdy foundation in place, you cannot proceed to take on additional debt.

Failing to Plan Ahead

As your ministry grows, there are new financial challenges that arise. Only when you have effective internal controls in place can you take on a church mortgage with greater responsibility. Strategic planning by catering for reserves that enable the church to continue its operations while paying off loans allows your ministry to continue. Taking a church loan in the absence of proper planning is suicidal. Secure your ministry’s future by responsibly monitoring your church’s financial health before applying for a loan.

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