What secures my investment?
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As we continue with the frequently asked questions about private lending, we answer the question of: What secures my investment?
Here is how we answer that:
Each time we borrow money we borrow it from one person and secure it against a specific property.
Your loan to us is never pooled with others and it is never unsecured.
A third party (usually a title company, an escrow company or closing attorney) has you place your finds into escrow awaiting the official closing. They prepare all the paperwork including the note which details the exact agreement for the loan and a security instrument like a mortgage or deed of trust that ties the loan directly to a specific property. Your funds are not released until all the paperwork has been completed and signed. This is the same paperwork that a bank uses to make loans and to secure their investment.
Until my next post,
James
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