Private Mortgage

Private mortgages are mortgage loans which are funded by a private individuals, trusts, partnerships, real estate investment groups and retirement funds. This private money mortgages are sometimes called a hard money loan or private money mortgage. These private mortgages are not offered by banks or commercial companies. We have private investors that can fund these private mortgages / hard money loans if you are in need of this type of mortgage loan.

Is a Private Mortgage Right For You?

Private mortgages are for a very select type of customer. The most common borrower for a private mortgage / hard money loan is an individual who has one of three issues that requires them to obtain this type of loan. The issues are usually because of credit, income, or property type / condition. If you have an issue that is deemed a higher risk, you may want to explore an private mortgage. A private mortgage may be for you if:

• You are behind on your current mortgage payments
• Facing foreclosure or have a notice of default filed against you
• Have been to the banks and they have said "NO" because of income or credit

As noted before a private mortgage is for borrowers who do not qualify for a typical mortgage loan which offers lower mortgage rates. A private mortgage will come at a higher cost than a traditional mortgage and you should explore other mortgage financing options first but if you have already exhausted your options, a private mortgage may be an excellent temporary mortgage solution for you.

Private Mortgages, The "Band-Aid" of Mortgage Solutions.

Private mortgages are for high credit risk borrowers and properties. As with any type of investment - High Risk = High Reward. If you are a high risk borrower due to your current financial situation be prepared to give a private investor a "High Reward" for taking the risk to help you by funding a private mortgage. What we mean by high reward is a high interest rate and high loan costs. You can expect private mortgage rates to vary from 9 up to 17% dependant on the risk and if first or second private mortgage.

Since private mortgages are used as a temporary mortgage solution until you are able to resolve whatever is "ailing" a borrower. Just like a band-aid which is used only temporary until a cut heals, you should plan on keeping a private mortgage for only a short time until you are able to heal the situation that is preventing your from being able to borrower a traditional mortgage.

Most situations requiring a private mortgage can usually be corrected within 6 to 24 months. Although a borrower requiring a private mortgage may be paying a higher mortgage rate on a hard money loan than a normal conventional loan, this options often makes sense, especially for someone facing foreclosure who will lose their home.

Does a Private Mortgage Sound Right for You?

If you are a borrower, REALTOR or mortgage broker who is in need of a private mortgage we can help you. The qualifying guidelines for a private mortgage are fairly simple. If you have a property and owe less that 70% of it appraised value, you may be able to qualify for a private mortgage. The equity in your home is the single most important factor for qualifying for a private mortgage because it helps offset the risk to the private money mortgage investor. So as an example:

• Property Value: $400,000
• Maximum LTV: 75%
• Maximum Private Mortgage: $300,000

In this example, you must owe less than $300,000 to obtain a private mortgage. There may be some certain cases where we can make exceptions but this is fairly good indicator as to whether you can qualify for a private mortgage.

Private mortgages can be used for many property types such as, homes, condominiums, townhouses, commercial properties, hotels, motels, construction loans and other real estate secured investments.