In Amy Hoak’s Wall Street Journal article, “Mortgage Lending for Sellers“, she points out the advantages to both buyers and sellers when a private mortgage is used to purchase a home.
With a private mortgage, the seller or some other interested individual holds the mortgage on the property. There are no bank or mortgage company requirements for the buyer to meet such as a steady income history for the past two years or a particular credit report score. Instead, the buyer and the seller reach their own agreement with their own terms.
Private mortgage income is attractive to sellers who are looking for a steady stream of income and are looking to defer capital gains.