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Private Mortgages: Borrowers
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For home financing, private mortgages between relatives and friends are particularly popular because they provide compelling benefits to both the borrower and lender. By setting up a private mortgage instead of a traditional bank mortgage, the borrower can realize thousands of dollars in potential interest savings and tax deductions, while the lender can benefit from a monthly income stream and a predictable rate of return. All in all, a private mortgage with CircleLending helps keep wealth where it belongs - in the family.
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A private mortgage is a financed property agreement through a company that allows a person to borrow to buy a home, but yet the company is not a bank, lender or loan broker. Private mortgages can be found by way of an Internet web site by doing a keyword search. By submitting personal financial information and responding to a survey or questionnaire, a potential borrower can be given loan information from several different lenders. Lenders will send the requesting consumer competing offers with no cost and no obligation. Documents for perusal such as electronic disclosures, privacy policy, settlement services, and lending disclosures will be provided to the consumer conveniently online.
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Private mortgage loans are usually for shorter term (6 months to 3 years) than traditional bank loans. The decision to lend is based upon the equity and value of the property being put up as collateral, not on the borrower's credit ordemanstrable income.
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If you are financing a home, you should be informed about private mortgage insurance (PMI). PMI is extra insurance that lenders require people to get, usually those who put less than 20 percent down payment. PMI basically protects the lender in case the borrower decides to default in payment at any time. These private mortgages gives people the chance to own a home, even if they do not have much money to put down.
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When interest rates of 14 percent to 18 percent are added to four to eight points, the borrower will be paying up more than 20 percent yearly for a private mortgage lend. This is an excellent agreement for private mortgage loaners. Moreover there is no need for the borrowers to pay higher rates when conventional mortgages range between 7 percent and 10 percent.
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Real Estate Investors seek Private Mortgages for a number of reasons. Typically, for reasons of a “unique deal,” expedience, credit issues, self employment, or when a borrower cannot qualify under the large number of requirements that the conventional lending sources need to be satisfied before they are able to lend.
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