The steps, in order
A borrower and lender agree on terms (amount, rate, term, loan-to-value), a real estate lawyer drafts the mortgage document and registers the charge on title, funds are advanced at closing, and payments follow the agreed schedule until maturity or payout.
Why borrowers use private lenders instead of a bank
Speed (days or weeks instead of a bank's typical process), flexibility on property type or borrower situation, and approval where a bank has already said no — a rehab project, a short-term bridge, or a borrower who's self-employed and thin on paperwork are common reasons.
What the lender is actually taking on
The lender's protection is the registered charge and the equity cushion below it — not a personal guarantee alone. That's why loan-to-value discipline, not just the borrower's story, is what a careful private lender underwrites first.