Private mortgages are provided by individual lenders and institutions. These are short term loans that use your home as collateral. The typical mortgage term is between six months and two years. The loan is approved not based on the borrower’s credit history but the equity built up in his home. The loan amounts approved will be about 70% of the property’s value, if it is a home or income-producing land and 60% if the land is vacant or non-income generating. The interest rates charged on such mortgages are generally about 5% higher than prime rates.
There are many private lenders who offer these mortgages. You can get free quotes online and most other information can also be accessed from the lender’s website. You will have to fill an online application form, which will be a quick and easy process. The lender will get back to you within a day and your loan transaction will take anywhere between a week to ten days. If you don’t want to approach an online lender, you can ask a broker to put you in touch with private lenders in your city.
The property on which you want to take out a mortgage has to be in a good condition. You would have to pay off other liens on the property so that the private lender does not have a second priority lien. Make sure that all the terms agreed upon are documented correctly. Compare private mortgages from different lenders and choose one which best suits your needs.
