lara

Member
Private Mortgage
This is a question for those who may be selling a property or properties.

Would you consider a private mortgage.

I have done this in the past and it has worked out very well, for both parties.

This is just an idea, I can post further details if anyone is interested, or is this happening already?
 

Saoirse

Moderator
Private Mortgage
found this on google

It is possible for anyone to offer a private mortgage, you don't have to be a bank, or even a real estate professional. In some cases, the seller of a home may choose to offer aaa private mortgage, sometimes called a"land contract," or if there are existing underlying mortgages, a "wraparound loan." This can be an excellent tool for a seller having a hard time selling a home. It can be used as a way to finance a buyer who would not qualify for a conventional bank loan, or it may be a way to sell a home that may be difficult to sell otherwise because it is in a marginal neighborhood or needs considerable work.

The title is usually not transferred until after the entire loan has been paid; as such, the seller/financer retains full control over the property. There is very little risk in this practice; if the buyer defaults, the seller regains the house and keeps all the money the buyer has paid to date.

Some third-party private investors also offer private mortgages simply as an investment vehicle, because it is often possible to charge a rate of interest significantly above prime - especially if the buyer is not able to qualify for a conventional mortgage due to poor credit.

Regardless of whether the mortgager is the seller or a third party, the private mortgage is a negotiable instrument that can be bought and sold. The mortgage holder may choose at a later date to sell the mortgage to another investor at a discount, in order to receive a single lump-sum payment instead of monthly payments. In many cases, a private mortgage has a "balloon" clause, which requires the buyer to either pay off the priivate mortgage, or convert it to a conventional mortgage.

From the buyer's point of view, the private mortgage can be an excellent option, and may provide a way to purchase a home when bank loans are impossible. In cases where the buyer has poor credit, this provides an opportunity to build up equity and a positive payment record; in many cases, after a few years the buyer will be able to refinance the private mortgage with a conventional loan, at a more favorable interest rate.
 
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Private Mortgage
"The title is usually not transferred until after the entire loan has been paid; as such, the seller retains full control over the property."

Are you out of your mind? who would in their right mind trust an Turkish architect, he will sell the property without you knowing it and you wont be able to do anything about it...
 

Saoirse

Moderator
Private Mortgage
I think it may be more appropriate to for example a UK seller and buyer



ps dont shoot the messenger-I know sod all about mortages I just cut and pasted the article!
 

lara

Member
Private Mortgage
I will try to explain, once you have decided the price and the amount of interest, usually 3% above base rate, you both agree a time period, anywhere between 7-10 years.
This is then made into a contract by a solicitor, the solicitor then hold the contract until all monies have been paid, then the deeds are given to the new owner.

The good thing about this is that if you have a property that you really can,t sell, and that you don't need the income from, in one large sum, this can be an ideal solution.
If you are happy to receive a monthly income(mortgage), this can work really well for both sides, especially if those arrangements are made in this country(UK), I think alot of people would feel safer in terms of transfers of money and documents.
What do folk think?
 

Howell's

Member
Private Mortgage
my personal view is if the bank wont lend you the money then you shouldnt be borrowing.. Certainly if your putting a house up as collateral.
always read the VERY small print !!!
 

Saoirse

Moderator
Private Mortgage
well that would have been my view in the past but currently banks arent keen to lend at all regardless of your circumstances
 

lara

Member
Private Mortgage
I have done this in the past and it has worked out to everyones benefit, except the banks, should I weep.

The last time I did this, I paid the mortgage in seven years, the mortgage was actually used by the sellers to boost their pension.
Its important to have a good Knowledgable solicitor.

It actually works out better for the seller, given that the interest is going to them aswell.

If you have a property that isnt selling, this is one way of resolving the problem.
 

Saoirse

Moderator
Private Mortgage
a problem I could see would be if there were both UK buyers and sellers for a property in Turkey

Solicitors used and everything sorted in UK

Then the buyer, now living in the house in Turkey stops paying

Would be legal nightmare trying to get them evicted over there as a result of breaking a contract drew up in UK

Only a thought
 

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