Sir Richard Branson, and his seemingly never-ending business plan has reached out to a new industry, surprisingly, mortgage.
While many critics may think his timing is a bit funny, his spin on mortgage is somewhat different than what most banks and mortgage lenders are offering.
His new company, CircleLending, based in Cambridge, MA offers intra-family mortgages, which are essentially private loans and mortgages between relatives and friends.
Instead of settling for terms set by a third party bank or lender, the borrower and lender, who are presumably friends or family, can set up the financing terms themselves.
The friend or family member lending the money (the lender) can earn a higher rate of return as compared to what typical savings accounts are offering, while the borrower can secure an mortgage rate below market prices.
They also have a unique reverse mortgage product called Family Advantage which acts as a secured line of credit (similar to a home equity line of credit) funded by a relative or friend, which comes with no age requirement traditionally found on such loans.
“Intra-family mortgages” may also open doors for those who weren’t able to qualify for loans through conventional methods, especially now as underwriting guidelines continue to stiffen.
Along with the perceived savings on rate and flexibility on loan programs, the company says closing costs will be much lower than those found at standard banks and lenders nationwide.
Although it isn’t quite mainstream, Branson and his millions will likely spring the company into the spotlight when the timing is right.