Making a mortgage loan to a family member can be a win-win deal.
Proper documentation prevents tax problems and protects relationships.
How It Works in Four Easy Steps
Complete our simple online application
Documents emailed for review & signature in 7 business days
Lender disburses funds & documents registered with government authority
Optional loan management & annual IRS tax data
Real estate loans and financial gifts with relatives can be a win-win for both sides, but should be documented properly. National Family Mortgage ® helps minimize the legal and federal tax consequences that can occur when family real estate loans and financial gifts are documented improperly – or not documented at all.
You can use a National Family Mortgage ® in many of the same situations you might use a traditional bank mortgage for, including:
- To refinance an outstanding home loan
We want to help you make a loan that you feel good about, that prevents tax problems, and protects your relationship. We want to help your Borrower fund their dreams and stay on track with payments. Our goal is to make family mortgage lending and borrowing safe, easy, secure, and successful.
We facilitate Home Refinance loans in the following states:
AZ, CA, CO, CT, FL, IL*, MI, MO, NH, NJ, NM, NV, OR, PA, UT, WA, WI.
(This means the Borrower’s subject property is located in one of these states listed directly above.)
* If the Borrower’s subject property is located in Cook County, Kane County, Peoria County, or Will County, unfortunately, we cannot help you.
Please be sure to review our company Standards for complete restrictions and limitations.
Structure the Loan
How much are you going to lend? How much interest are you going to charge? How much can your Borrower afford to pay each month? Our free Family Mortgage Guide has lots of tips and advice on how to work with your Borrower to structure your loan to be a complete success. We also have some great calculators on the Products / Pricing page to help you get started.
Document the Loan
Once you and your Borrower have agreed upon loan terms, it’s time to make the agreement legally binding. Either you or your Borrower may submit your loan details through our secure online Application, with the following exceptions:
(1) If the subject property is in Pennsylvania, then the Borrower must submit our online Application and submit our one-time setup fee.
(2) If the Lender lives in North Carolina, then the Borrower must submit our online Application and submit our one-time setup fee.
All National Family Mortgages ® have two crucial components:
Promissory Note: The Promissory Note establishes the legal debt between the parties and records how the debt is going to be repaid.
Mortgage / Deed of Trust / Security Deed: This is the legal security instrument through which your Borrower offers their property as collateral to you in exchange for the loan. Attached to the Mortgage / Deed of Trust / Security Deed is a legal description of the property that we will obtain from the County authority where the subject property is located.
Within one business day of submitting your online Application, a Family Mortgage Advisor will call you to confirm the details of your loan. Within seven business days of submitting your online Application, we will email you your customized, state specific mortgage documents for approval and notarized signature. We will also include setup forms for our optional Family Mortgage loan servicing program.
When you’re ready, on the agreed upon loan issue date, you may disburse the refinance funds directly to the Borrower’s current lien holder (i.e., bank.), per their instructions.
Register the Loan
Return the original, notarized documents to National Family Mortgage ® for legal public recording at the appropriate government authority. You can rest assured that your investment is protected with a registered mortgage lien. Now, your Borrower will also be able to continue to legally deduct their mortgage interest payments from their federal tax return – just like with a bank mortgage. (They cannot legally deduct the interest payments on non-registered loans – even if the money is used to refinance a bank mortgage.)
Manage the Loan
With our optional Family Mortgage loan servicing program powered by FCI Lender Services, Inc., expectations are clear, relationships are protected, and year-end tax reporting is simple.
- Monthly payment reminders and statement
- Electronic payment processing and online account access
- IRS 1098 and INT-1099 tax reporting
- Toll-free customer support