Essentially, this type of mortgage is one that is provided by another person or even a business rather than the traditional route of choosing a bank. At times, it might be the only option left after getting rejected from a bank already. However, some people prefer this over borrowing from a finance provider.
A private mortgage is a mortgage contract in which the lender is not a registered financial institution. Instead, the lender may be an individual or group of individuals who provide money in exchange for secured interest on your real estate.
Banks have strict guidelines surrounding their lending practices limiting their ability to lend for certain scenarios or borrower profiles. With borrowers marginalized as a result of these strict lending guidelines, private mortgages are used to meet those unique needs. Situations where a borrower may require a private mortgage include financing for:
