The Finance Blogger


Questions about Private Mortgage Loans

Private Mortgage LoansWe received a question about private mortgage loans from a reader and will answer his questions in our next post.

Question to Debt Counselor about Private Mortgage Loans

We have an opportunity to borrow some money from a family member to use as a private mortgage loan and we are wondering if we should go ahead and take advantage of the offer.  The interest rate is very good and of course we do not need to qualify or show our credit rating. The family member wants to help us purchase our first home and is willing to act as the mortgage holder and provide us the funds. Should we go ahead with this offer?

Do you currently have a mortgage? :: No, this is a first time home purchase for us and we are really excited.

Home/Mortgage Loan Amount :: $90,000, we have a down payment of $25,000

Other Loans, Including Credit Cards:: nothing

Are you employed and for how long:: Just started a new job after graduating from university.

Your credit rating to be – excellent, fair, or bad? :: Not sure if we even have a credit rating at this point, since I have no loans and just got a credit card

Gross Amount Per Paycheck :: $$3,000 a month

Do you agree to have this information published online, without your PRIVATE information of course? :: yes

Extra information here please (some detail)::

Having just graduated from university we are in an unique situation in that we have the money for a down payment and we have an offer from a family member to provide the mortgage for us at a below market interest rate. The offer sounds great and we are wondering if we should take advantage of this private mortgage loan offer? Also are there steps we should take to ensure that both parties are protected. We want to make sure that this does not generate any difficult situations due to misunderstandings.

This is a close family member who is trying to help us out. We also have brothers and sisters who might want to take advantage of the same kind of offer. We are unsure of how the person who is helping us would be able to deal with that situation. They are well off, but we are unsure if they are sufficiently well off to be able to provide several mortgages to various family members.

If they help us and do not help our other siblings, this could really create some problems for all of us in terms of jealousy and favoritism. We all get along great now and really do not want to do anything to disrupt this great relationship that we now have. We have heard horror stories from other people who have taken mortgages from family members and found that it did not work out. What should we do? Should we just try to get a mortgage from a bank?

 

If you have a question about debt, loans , mortgages or other financial situations, please feel free to leave a comment with as much detail about your situation as you can. We will try to answer your question in our next post.

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