How a Private Mortgage Can Help You
A private mortgage is basically the same
as a bank
mortgage except the lender is a private individual or
company. While the lender holds the property
as collateral
(like a bank), less consideration is given to the credit rating and
income of the borrower. If you do not fit into the
guidelines
of a bank because of a low credit rating or income, a private mortgage
may be your best option. Private mortgages are more expensive because of fees and legal costs
but they can save you a lot of money and grief; here are a few examples:
-Use a second mortgage for debt consolidation (save on credit card interest costs)
-Avoiding prepayment penalties if refinancing is required (use a 2nd until the first mortgage is up for renewal)
-Short term financing without difficulties of more rigid qualification guidelines (Perfect for construction mortgages)
-Using a second mortgage to avoid paying high ratio mortgage insurance premiums
-Temporary credit or income problems (explained further below)
The term (mortgage contract) of a private mortgage is usually for one year and an interest rates can be from 5.75% to 11.5% for a first mortgage or 7% to 15.90 percent for a second mortgage. Because lender risk, market demands and the property itself all affect what interest rate will be charged, but recently there have been rates as low as 4.5 for a first mortgage, (conditions do apply). It is best to call or contact me for the most up to date and accurate information possible.
When a bank won't help
How would a private mortgage help you in times of need? If you have credit problems like foreclosure, income tax demands, property seizure and credit card delinquency. A private mortgage with a term of one year will usually give you the time to correct most problems that would cause these situations and your credit rating to report poorly. Also, if your income (or ability to show income) is challenged, again a private mortgage looks more to the property than the borrower. This allows you time to change your income or your ability to show your income. The bottom line is: private mortgages buy you time to repair situations when conventional lenders such as banks say no.
If you think a private mortgage may be something you need, call or email so we can get together to figure out the best course of action for you..
