A private mortgage or home equity mortgage should be used carefully. As we discussed in our previous article “How Much Do Home Equity Loans Cost?”, the short term costs can be higher than what we’re used to.
Here less expensive alternatives to consider before applying for a private mortgage:
- Savings or Investments – using available cash and sometimes liquidating investments is the best option before borrowing money.
- Help from family – it’s hard sometimes to ask for help but it could save you thousands of dollars. Speak to your family about borrowing some money. If they are happy to help, draw up an agreement which should include how much you are borrowing, when/how you plan on paying the money back, and the loan terms.
- Line of Credit – if you currently have a Home Equity Line of Credit or an unsecured Line of Credit with available funds, use this first. The interest rate will be much lower than a non traditional mortgage or credit cards.
- Non bank loan – if you require $30k or less, an unsecured loan may be better than a mortgage. We have access to several companies who specialize in small or micro loans. Speak to us for more details.
If none of the four above options are suitable for your unique situation, please contact us for help and we’ll be happy to discuss a customized borrowing plan.
Continue learning about Home Equity Loans and read our next article: What Can You Do With The Money From a Private Mortgage?