• About
  • Apply by FAX
  • Apply On-line
  • B2B- Realtors
  • CHIP Reverse Mortgage Plan for Canadian Seniors
  • Contact
  • Credit and Solutions
  • Documents Required for Mortgage
  • FAQ
    • Fixed vs. Variable Rate
    • Mortgage Terms
    • Types of Mortgages
    • Web Links
  • Mortgage and Financing Solutions
    • Mortgage Solutions
  • Mortgage Calculators
  • Mortgage Rates
  • Our Services
    • 2nd Mortgage
    • Buying a Home
    • Commercial Mortgage
    • Debt Consolidation
    • Home Equity Financing
    • Mortgage Refinancing
    • Our Investment Services
    • Renewal
    • Reverse Mortgages
  • Privacy
  • WHY USE A MORTGAGE BROKER?

TORONTO MORTGAGE TRENDS >>>

~ One Stop Mortgage & Financial Solution.

TORONTO MORTGAGE TRENDS >>>

Tag Archives: private investor

Q: What are Private Mortgage Investors?

26 Friday Aug 2011

Posted by torontomortgagetrends in best interest rate, information exchange, mortgage broker, Mortgage FAQ, Mortgage Lenders

≈ Leave a comment

Tags

holding a mortgage, mortgage investor, mortgage investors, private investor, Private Mortgage Investors, sluggish market

Q: What are Private Mortgage Investors?

A: Most mortgages are held by banks or other financial institutions. Increasingly, however, individual persons are choosing to hold mortgages directly, mostly because the investment returns that can be made on interest.

Typically, the holder of a private mortgage is the seller of the home. In this instance, the owner sells you the home and carries back a mortgage called Seller Take Back Mortgage and a note on which you make payments. If you default, the mortgage allows the owner to foreclose on the house, just as if he or she were a commercial lending institution. This is an easy way for a homeowner to sell his or her home in a sluggish market and get all of his or her asking price. It’s beneficial to the buyer, who doesn’t have to undergo an extensive credit and finance check. The downside to being a seller who is holding a mortgage is that he or she must wait for the money. If a seller doesn’t have the ability to do that, then he or she may sell the mortgage to a third party private mortgage investor.

Mortgages are negotiable instruments, and they can be bought and sold on the open market like stocks or bonds. The advantage to seller is that he or she gets the lump sum of cash, but the advantages to the private mortgage investor are even better. Usually, mortgages sell for a discount of their face value (less than the amount of the principal). This means that not only does the investor get to collect interest on the note, but he or she actually makes a profit on the principle amount.

Sometimes, a third-party private investor will offer a mortgage to a home buyer. In this situation, the investor is not the owner of the home, rather it is a person who lends the buyer the money to purchase to the home and takes back a promissory note, secured by a mortgage, just like a bank or financial institution would do. Like a bank, the third party investor makes money on collecting interest.

Potentially, private mortgage investors can make more money from a private mortgage than a bank could from a traditional mortgage because they can charge higher interest rates. They charge higher interest rates because they take on greater risk in lending to people who can’t qualify for traditional mortgages. Usually private mortgage lenders work with people who have sub-prime credit, but they may also work with risky projects regardless of credit. For instance, commercial construction loans for un-established businesses may be financed through private mortgage investors.

If you are just looking for an owner who will finance your purchase, check the for sale by owner FSBO ads. Most owners will say in the ad whether they are willing to finance the purchase. If you have your heart set on a house that is not FSBO or the owner hasn’t mentioned it, ask. It’s not something that people think of right away, but many people are open to it once it is explained to them. Particularly once they realize they can sell the mortgage if they need to get out. Otherwise, ask your agent to do some research on the internet or do it yourself. You could try contacting an investment firm which may be able to put you in touch with private mortgage sources.

Now let’s assume in your case, you might be any one as below?? And

Looking for making money or saving money….simply contact us

Advertisements

Pages

  • About
  • Apply by FAX
  • Apply On-line
  • B2B- Realtors
  • CHIP Reverse Mortgage Plan for Canadian Seniors
  • Contact
  • Credit and Solutions
  • Documents Required for Mortgage
  • FAQ
    • Fixed vs. Variable Rate
    • Mortgage Terms
    • Types of Mortgages
    • Web Links
  • Mortgage and Financing Solutions
    • Mortgage Solutions
  • Mortgage Calculators
  • Mortgage Rates
  • Our Services
    • 2nd Mortgage
    • Buying a Home
    • Commercial Mortgage
    • Debt Consolidation
    • Home Equity Financing
    • Mortgage Refinancing
    • Our Investment Services
    • Renewal
    • Reverse Mortgages
  • Privacy
  • WHY USE A MORTGAGE BROKER?

Meta

  • Register
  • Log in
  • Entries RSS
  • Comments RSS
  • WordPress.com

2nd Mortgage – 3rd Mortgage agencies in canada b2b partners baker road. best mortgage brokerage office brokerage operation business Centum Metrocapp centum mortgage closed mortgages Closing Costs conventional mortgage convertible mortgage convertible mortgages credit options credit worthiness debt consolidation loan economy educated borrowers financial group inc financial obligations fixed rate loan fixed rate mortgage free credit report gordon baker holding a mortgage home equity loan independent mortgage broker information employment loan product lowest mortgage rates lump sum payment money makes sense mortgage approval mortgage brokerage mortgage brokers. mortgage consumers mortgage customers mortgage experts Mortgage FAQ mortgage holder mortgage investor mortgage investors Mortgage Lender mortgage lenders mortgage products mortgage professionals mortgage solution negative comments new home buyers own mortgage payment flexibility poor credit score pre approved mortgage private investor Private Mortgage Investors private mortgages product choices product launch race ethnicity real-estate refinancing your mortgage resource appraisal right mortgage royal bank of canada. sluggish market survey fee term mortgages Today's Best Rates typical home inspection Understanding Private Mortgage variable rate mortgage wraparound loan Your Credit Rating

Categories

  • best interest rate
  • centum
  • credit
  • information exchange
  • mortgage agents
  • mortgage broker
  • Mortgage Brokerage
  • Mortgage FAQ
  • Mortgage Lenders
  • Today's Best Rates
  • Uncategorized

Recent Posts

  • Bank of Canada holds rate, suggests more hikes likely at more cautious pace!!
  • MPC : Ottawa’s recent changes to mortgage rules are making homes less affordable for Canadians and dampen housing activity, which could impact economic growth.
  • Bank of Canada announces rate (Unchanged)
  • Mortgage terms should also be taken into consideration, not just rates.
  • Happy Canada Day to All

Archives

  • October 2017
  • March 2017
  • February 2017
  • July 2016
  • June 2016
  • April 2016
  • January 2016
  • October 2015
  • September 2015
  • May 2015
  • April 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • October 2013
  • September 2013
  • June 2013
  • February 2013
  • December 2012
  • October 2012
  • May 2012
  • February 2012
  • December 2011
  • October 2011
  • September 2011
  • August 2011

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 509 other followers

Advertisements

Vijay Gandhi | Mortgage Broker | Direct :+1-647-267-6338

CENTUM Metrocapp Wealth Solutions Inc, Lic.# 12147

Blog at WordPress.com.

Cancel
Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy