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When and why to get a private mortgage?

A private mortgage makes sense for a lot of people who are looking for ways to buy a property. With a private mortgage, you are essentially borrowing the money from another person, institution or business instead of following the traditional route of borrowing money from a bank. This often poses a win-win situation, as the person you will be lending from will benefit from the added income generated from the interest. There are, however, a few things you should consider before embarking on a private mortgage agreement:
  • If you are borrowing from a private person that you know, this could change the dynamic of your relationship. While most people interested in a private mortgage do so with good intentions, life isn’t always predictable and it’s possible you might have problems repaying your mortgage in the future. How will this affect your relationship with the lender? If, for example, you are borrowing the money from a spouse or parent, you might impact their ability to repay their own debts, save for the future or pay their bills.
  • The lender will also have to assess the affordability of your mortgage, the value of the property and your ability to maintain the property you are purchasing.
Your best bet is to partner with experienced professionals such as the The Mortgage Hunter in order to set out a private mortgage agreement for you. This way, everyone’s responsibilities and expectations will be clear and in writing. If you need advice about private mortgage agreements, then we can help you. Contact us for more information today.


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