New Adjustable Rate Mortgage (ARM) Loan Capability Launched by CircleLending

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Now, for the first time, home buyers can write their own ARM when setting up a private mortgage with a family member or friend. CircleLending, the only company solely devoted to formalizing and servicing loans between friends and family, today introduces an adjustable rate mortgage capability between private parties. Private ARMs bring a level of flexibility and lower monthly payments while providing borrowers with protection from rising rates and lenders with a fair return.

CircleLending, Inc. (, the leader in formalizing and servicing family-and-friend loans, now documents and services adjustable rate mortgage (ARM) loans between private parties. With long-term interest rates trending up, ARMs now account for nearly 30 percent of all mortgages, according to recent Mortgage Bankers Association surveys.

Private ARMs bring a new level of flexibility to borrowers and lenders. Rates and monthly payments on private ARMs are generally lower than on ARMs from traditional lenders; and private ARMs do not carry the outsized risks of option ARMs recently popular with borrowers stretching to buy a home.

Structuring an intra-family mortgage loan as an ARM creates an advantage for some participants in that they can charge a substantially lower interest rate. Initial rates on these loans must match or exceed the Applicable Federal Rate (AFR) to avoid being deemed a gift. The AFR for adjustable rate mortgages is lower than for fixed rate loans.

Structuring a private adjustable rate mortgage loan with CircleLending brings borrowers a degree of certainty by fixing rates for three, five or seven years. Interest rate adjustments are then tied to the prime rate as published in The Wall Street Journal. Annual adjustments can have a margin of prime plus one, one-and-a-half or two percent. The annual percentage rate will never increase more than two percentage points in one year and will never exceed 16%.

Free Educational Material Available

Borrowers and lenders can download a free educational guide to private mortgage loans or begin a fast and easy loan set-up process at Phone support is also available from CircleLending loan specialists.

“The time is right for a loan that gives borrowers and lenders seeking shorter-term rate commitments the potential savings of an adjustable rate mortgage with the inherent benefits of a loan between private parties,” says Asheesh Advani, CircleLending president and CEO. “Rising interest rates and housing prices, and the desire for flexibility, make our latest offering the perfect choice for the increasing number of people considering an interpersonal loan.”

CircleLending creates standard loan documentation, structures a payment schedule, tracks payments, sends payment reminders and annual statements, and more, for all loans it helps formalize. Professional loan servicing plays an important role in preserving relationships when lenders and borrowers are related.

About CircleLending

CircleLending, Inc. ( is a rapidly growing financial services company uniquely serving the needs of the interpersonal lending market in the United States. The company provides loan documentation, payment processing, and loan servicing in order to facilitate private loan transactions between relatives, friends, and other private parties. CircleLending provides the general public with a variety of free guides -- on topics such as intra-family mortgages, small business borrowing, seller financing, and private lending -- that help individuals make informed decisions about structuring and managing private loans.

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Meara Murphy
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