Simply put, a private mortgage is a loan given by someone who is not a formal money lender. Whether you want to lend or borrow privately, a private mortgage is beneficial to everyone, provided that it is a fair deal, with all the necessary paperwork.
Why Go Private?
In today’s age, there does not seem to be a reason to invest in private mortgages. With banks, money lenders, and even online applications for loans, why go private?
Low Credit Scores
If you are in need for a loan, then you must have gone to a bank or lender. However, if you have a low credit score, ten it is more than likely that you have been refused at least a few times. In such dire straits, going to someone you know and trust for a loan seems like the next plausible option. Even if you have the ability to repay the loan, this might not be showing on your credit report. This might cause an official lender to have less faith in you.
Keeping It in the Family
If you are someone with money to spare, it makes perfect sense for you to help a family member. You know and trust the person, and you are usually confident in their abilities to repay their loan. However, sometimes situations may arise, preventing them to repay the money. This may cause a sense of awkwardness between the two of you. However, the main thing to do is to talk out the issues at hand, and clarify the position you have.