Chapter 14 Types of Financing

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Chapter 14Types of Financing

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Adjustable Rate Mortgage
What to look for?
ARM

• Interest rate
• Margin
• Adjustment period
• Interest rate cap
• Payment cap
• Negative amortization
• Disclosures

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Other Financing

• Graduated Payment Mortgage
• Equity Sharing
• Rich Uncle Loan
• Package Mortgage

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Other Financing (continued)

• Blanket Mortgage
• Reverse Mortgage
• Interim Loan
• Construction Loan
• Blended-Rate Loan
• Equity Loan

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Affordable Housing Loans

• Underwriting standards are modified to recognize
  different forms of credit responsibility.
• Prepurchase home buyer education.
• Low down payment.

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Comparison of Conventional Mortgage to AIM
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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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Buyer
Seller
1st Lender
20,000Debt
60,000Debt
(Includes wrapped 20,000)
Wraparound Mortgage
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Financing

• Subordination
• Contract for Deed
• Option
• Rental
• Creative