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WHAT IS A FAMILY MORTGAGE?
A private mortgage is a loan between private parties,usually two individuals, which is secured by real estate.Just like a traditional bank mortgage, a private mortgagemight be used to buy, renovate, or refinance a home, oreven as a way to secure a personal loan used for othernon-real estate purposes. A private mortgage can pro-vide the structure of a bank mortgage while retaining theflexibility associated with loans between relatives andfriends, resulting in a win-win transaction for both theborrower and the lender.When the loan is between family members, we call it –you guessed it - a family mortgage.You can use our Family Mortgage in many of the samesituations you might use a traditional bank mortgage,such as, to:Help purchase a home.The money can be used for theentire purchase of the home, for the down payment, orto supplement bank financing and avoid paying PrivateMortgage Insurance (PMI).Refinance a bank mortgage.The money can be used tolower the interest rate, to eliminate PMI, to keep interestpayments within the family rather than paid to a bank,or to achieve more favorable terms.Formalize an existing home loan from relatives.Homeloans from relatives made in the past can be formalizedto realize tax benefits, such as interest deductibility,capital gains write-offs, and legal benefits (e.g. probate,legal protection).Renovate a home.The money can be used in place of ahome equity loan.When you or someone you know needs mortgage financ-ing, consider a Virgin Money Family Mortgage. Here’swhy:Family Mortgages keep the money in the family.Interestis going to have to be paid on the mortgage, whether itis to a bank or to a family member. Why not pay it tosomeone you know?
Family Mortgages create a win-win situation for theparties involved.It is possible to design a private mort-gage so that lenders generate a higher return than theywould in a money market or a savings account, and sothat borrowers get lower interest rates than they wouldwith a traditional lender.
REAL PEOPLE. VIRGIN MONEYPROFILES
LINE UP A HOME LOAN FROM FAMILYOR FRIENDS.
When Amy Semerjian decided to buy a 1904farmhouse in Northampton, Massachusettsshe assumed she would get her mortgagefrom a bank. Then, her mother made her anoffer she couldn’t refuse: use Mom and Dadas her lender. Her mother notes, “I figured, ‘why is my daughter paying the bank whenshe could be paying me?’”
With the help of Virgin Money, Amyborrowed $180,000 from her parents. Butthis wasn’t a loan sealed with a handshakeand a promise. She signed paperwork everybit as official as she would at a bank. As aresult, she secured a tax-deductible mort-gage at a competitive 5.75% interest rate,avoiding lenders’ fees and keeping themoney she pays in the family.Meanwhile, in addition to helping theirdaughter, Amy’s parents earn a decentreturn on their investment, which is noteasy in these days of low interest rates. “It’s a little bit scary borrowing from yourparents, but this is an official thing,” saidAmy. “And in our situation, it’s to ourmutual benefit.” Amy’s parents are nowearning $1,200 a month from theirdaughter’s loan. “The mortgage was actu-ally $173,000, but she wanted a little extrafor shoes,” joked her mother. “It’s so nice tokeep it in the family.”
TO GET STARTED SETTING UP YOUR FAMILY MORTGAGE TODAY, VISIT:
WWW.VIRGINMONEY.COM
OR CALL
1.800.805.2472
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