The number of people opting for private arrangements to get a home mortgage is on the rise and so is the number of people regretting the decision. Just like any other mortgage, private mortgage has its own risks and it is upon you to take all the necessary steps to ensure that it works in your favor. If you were considering taking this route to secure a home, here are four tips to increase your chances of getting the most from the private mortgage-:
When you are dealing with private mortgage lenders, it is in your best interest to formalize the loan, even if the lender is your blood relative. It is highly recommended to document the loan agreement and register it with a licensed notary or attorney.
Most people tend to think that private mortgages should be interest free, but this should never be the case. It is in the best interest of both parties to have an interest on the mortgage. For the lender, the interest is to take care of the inflation and for the borrower the interest is solely for tax benefits, with regards to home mortgage tax deductions. Therefore, it is advisable that both parties agree on a favorable interest rate to be charged on the mortgaged, and in most cases, this will always be lower than the current rates being charged by other lenders.
It is vital that both parties discuss various contingencies that might affect the private arrangement. For example, what happens if the borrower encounters unforeseen financial troubles and is unable to honor the repayment plan? What structures will you have to ensure that there is no defaulting? This is the stage when you need the help of a notary or an attorney to help you come up with favorable terms to protect the interests of both parties.
You first had a personal relationship with the lender before you had a financial relationship. Should things to south, get a mediator or if you are related by blood, try ironing out the issues at the family level first, before you consider other methods.
Mortgage brokers play a crucial role in helping individuals and families secure the financing they…
When it comes to real estate, timing is everything. By helping people connect with suitable…
In Montreal, a determined woman named Jana confronted a difficult phase in her life, marked…
When it comes time to take out a mortgage on a purchase project, most people…
Borrowing and lending: these terms refer to a financial transaction and are considered synonymous. However,…
When buying a property, most people rely on a mortgage. But once a house is…