Types of Financing
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Transcript of Types of Financing
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© 2012 Cengage Learning
![Page 2: Types of Financing](https://reader036.fdocuments.in/reader036/viewer/2022070400/56812d03550346895d91dbca/html5/thumbnails/2.jpg)
© 2012 Cengage Learning
Types of FinancingChapter 13
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© 2012 Cengage Learning
In This Chapter
You will look at the almost endless array of mortgage rates and accompanying fees used in today’s finance market.
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© 2012 Cengage Learning
Adjustable Rate Mortgage
Interest rate Margin Adjustment period Interest rate cap Payment cap Negative amortization Disclosures
What to look for?
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© 2012 Cengage Learning
Other Financing Methods Graduated Payment Mortgage Equity Sharing “Rich Uncle” Financing Package Mortgage Blanket Mortgage
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© 2012 Cengage Learning
More Financing Methods
Reverse Mortgage Construction Loan / Interim Loan Blended-Rate Loan Equity Mortgage
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© 2012 Cengage Learning
Affordable Housing Loans Underwriting standards are modified to
recognize different forms of credit responsibility.
Consumer education. Low down payment.
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© 2012 Cengage Learning
More Financing Methods
Conventional Loan (97%) The Nehemiah Program
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© 2012 Cengage Learning
Seller Financing The current owner of the property agrees to
accept part of the purchase price in the form of a loan (promissory note and mortgage or deed of trust) also becoming the lender in the transaction.
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© 2012 Cengage Learning
Wraparound Mortgage
BuyerSeller$20,000
Debt$60,000
Debt
1st Lender
(Includes wrapped$20,000)
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© 2012 Cengage Learning
Financing Techniques Subordination Contract for Deed Option Creative Financing Rental Land Leases
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© 2012 Cengage Learning
Investing in Mortgages Individuals can invest in mortgages Individuals can purchase junior mortgages Higher yields available
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© 2012 Cengage Learning
Key Terms ARM Affordable Housing
Loan Asset Blanket
mortgage Construction loan Equity sharing
GPM Negative amortization Option Package mortgage Reverse mortgage Seller Financing Wraparound mortgage