Private Mortgage- Would it matter if you are in a different country?

Yes, the real estate laws differ even from state to state in United States of America. Still the answer depends on the laws in your country/state and how easy it can be for you to set up your own mortgage. So here are some general rules for the home owners in Australia which are different from US Real Estate laws.

So what you do when you are in a different country where first, send them to a mortgage broker accredited with all lenders. You may find they can get a non-conforming loan at a slightly higher rate and save yourself the trouble.

Second, don’t rely on balloons or interest rates. Calculate what you would expect to be paid for the remainder in one or two years time including interest rates and inflation. Then make an agreement with them that they will re-finance to borrow the remainder and pay you out in one or two year’s time. (Reasoning is that one or two years should be sufficient to realize a rise in value creating equity on which to draw coupled with a solid period of steady credit history which is sufficient to make the banks review their lending capacity criteria in relation to the borrower) Also make a backup plan with penalties should this fail (so the borrower is legally taking the risk)

Third, go to a lawyer and have a legal contract drawn up.

But, unless you really know and trust the buyers and are therefore doing it as a favor, don’t do it. You can surely find someone else to buy your house in this huge real estate market. You can’t get money out of people who don’t have it.


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