Chapter 14

Types of Financing___________________________

Adjustable Rate Mortgage

• Interest rate

• Margin

• Adjustment period

• Interest rate cap

• Payment cap

• Negative amortization

• Disclosures

What to look for?

Other Financing

• Graduated Payment Mortgage

• Equity Sharing

• “Rich Uncle” Loan

• Package Mortgage

Other Financing (continued)

• Blanket Mortgage

• Reverse Mortgage

• Interim Loan

• Construction Loan

• Blended-Rate Loan

• Equity Loan

Affordable Housing Loans

• Underwriting standards are modified to recognize different forms of credit responsibility.

• Prepurchase home buyer education.

• Low down payment.

Comparison of Conventional Mortgage to AIM

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.

Wraparound Mortgage

BuyerSeller$20,000

Debt$60,000

Debt

1st Lender

(Includes wrapped$20,000)

Financing

• Subordination

• Contract for Deed

• Option

• Rental

• Creative