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Speaking money on the home front: Christine says 'Rent!' Ali says 'Buy!'

(CNN) -- "To buy or not to buy: That is the question."

That's how Shakespeare might have put it if he had considered the housing issue instead of writing Hamlet.

You probably know that the housing market is in the worst shape we've seen in decades. Prices have declined from the record highs they reached in late 2006 to levels last seen in 1998. We've lost 10 years of housing gains.

Vacancies are at an all-time high. Foreclosure rates are stubbornly high. How did this happen and what does it mean for you?

How it happened goes like this. In the early 2000s, our country experienced a housing bubble. Government policies encouraged home ownership and banks gladly lent to almost anyone who could sign a mortgage document. Interest rates were low, and "no money down" became a mantra. With more people looking to buy homes, prices rose. Then people borrowed against the rising value of their properties, putting themselves deeper in debt but figuring it was safe to do so, since property values kept going up, up, and still higher. Developers jumped in with both feet, increasing the available housing stock. Then the economy began to slow down.

The first to feel it were the low folks on the totem pole. They'd had no business buying homes in the first place, and banks had been foolish to lend to them. But the banks didn't own the loans anymore. They'd sold those loans to investment firms that bundled thousands of loans together, sliced them into thin tranches, and sold those tranches to pension funds, foreign countries, and other institutional investors, including other banks. When the marginal individuals at the bottom of the pile began defaulting on their mortgages, it began a cascade of trouble that roared through the entire global economy. Interest rates rose, putting more stable borrowers at risk of default. They'd been comfortable paying an adjustable rate mortgage of x, but when it suddenly became 1.5x, or 2x, the story changed.

ARA Content on interpersonal loans

News headlines continue to keep detailed the struggles homeowners face escalating adjustable rate mortgage payments, the collapse of the subprime lenders and mounting home foreclosures nationwide. Even without these concerns market, the banks offer so many different mortgage products and confusing that it’s hard to know what is in the best interest of home buyers. These days, choosing a mortgage is a daunting experience for first-time home buyers.

Increasingly, homebuyers are rediscovering an old option to finance their mortgage, a handle to the confusion, paperwork nightmares and threats of exploding floating rate: Take a private mortgage with the Bank of Mom and Dad.

A private mortgage is a loan from a relative, friend or other person, which is secured by real estate. A private mortgage (also known as intra-family mortgage) are connected to the structure of a bank mortgage, while retaining the flexibility to loans between relatives and friends, what a win-win deal for both the borrower and lender.

Interpersonal loans between relatives are not uncommon – more 10 million people in the United States are engaged in inter-personal loan at a certain time. Is for the construction financing, private mortgages offer compelling advantages for the borrowers and lenders. The borrower can realize savings of thousands of dollars in interest and tax breaks, while the lender a monthly income stream and a predictable return, which may be higher, as it will get through savings accounts or other fixed-income investments can benefit. For both, a private mortgage helps keep wealth where it belongs – in the family.

Circle Lending, a financial services company that sees itself as a market pioneer in the design of private mortgage lending services to the masses recognize that there is a great need for non-traditionalFinancing on the market today.

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