WHAT ARE PRIVATE MORTGAGES? PRIVATE MORTGAGES are mortgages lent and held in Private. They are as the name implies: Private Money available for Loans and Mortgages. This money is called HARD MONEY, in distinction to investments, securities, and barter. It is backed with actual CASH. There is an active market in barter, that the IRS recognizes, which we will not explore here. Suffice it to say, even trades between land owners happen everyday, without any Hard Money changing hands.
WHO PROVIDES THE HARD MONEY FOR PRIVATE MORTGAGES? People just like you, provide Cash for homeowners, investors, and even commercial ventures. At times, Private Mortgages are funded by Associations, Trusts, and Retirement Funds. Most any type funding that is other than Banks, Savings & Loans, Insurance Companies, and Commercial Trusts are from Private Money. All it requires is the Cashand know how to begin offering PRIVATE MORTGAGES.
WHY WOULD I WANT TO INVEST MY MONEY IN PRIVATE MORTGAGES? THE PROFIT, THE SECURITY,THE LIQUIDITY, and THE EQUITY even if the contract goes sour. The Profit comes from the Interest you charge for the use of your Hard Money. The interest that lending institutions charge can be as high as 8 points over the Prime Rate Interest without facing unusual government scrutiny. You may even charge more, if you and the borrower agree that there are extenuating circumstances.Higher Risks deserve higher interest rates.
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