Tag: DC Fawcett VREIC

DC Fawcett Reviews Some Real Estate Terms

In this article we would read about DC Fawcett’s definition and elaboration on some real estate terms

100% mortgage

Definition

A 100% mortgage is a loan in which the borrower receives a loan amount equivalent to the total value of the property in real estate to be purchased.

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Elaboration

Advantages

Disadvantages

  • It sometimes results in the borrowers securities to be liquidated to cover an asset or property which a borrower has offered as security or property to secure the loan.

18-hour city

Definition

18-hour city is a second grade city which has a more than an urban average population growth, lower cost of living and lower cost of doing business and serves as a prospective area of investment for real estate investors as compared to the big 6 cities.

Elaboration

Advantages

  • Good for real estate investors since property values tend to be stable while not showing sharp rise or downfall.

  • The cost of doing business is less expensive here and hence this draws in a large number of employers. This in turn tempts a huge number of job seekers. So there is an enormous population intake into these cities hence real estate prices tend to soar.

Disadvantages

  • These cities don’t have a proven track record so it’s risky to invest in these

2-1 Buy down

Definition

A 2-1 buy down is a kind of mortgage which has 2 temporary interest rates which increase in a stair-step fashion until a permanent value is reached.

Elaboration

Sometimes the cost of a buy down is calculated and each month a fixed amount which is equal to the difference between the original permanent mortgage payment and the temporary payment is paid by the buyer. At other times it is treated like a traditional mortgage. In both these cases the buyer must ensure that it is financially beneficial to him. The initial interest rate reduction is paid by the buyer so that he becomes eligible for the mortgage or by the builder as an incentive to purchase the home.

Absentee Landlord

Definition

An absentee landlord is a real estate owner who rents out or leases his property to another person, but does not stay on the premises.

Elaboration

The Absentee Landlord can be anybody from a local home owner to an overseas conglomerate. An absentee landlord usually has a significantly valued property. An absentee landlords target for investing is usually from the long term viewpoint. He invests for the purpose of rental income rather than capital appreciation.

Absolute auction

Definition

An absolute auction is one in which the sale is awarded to the bidder who has quoted the highest price.

Elaboration

There is no minimum price required to sell in this auction. One example is when a foreclosed property is auctioned, the property goes to the highest bidder which is different from an auction in which the lender has to approve the bid.

See also –  DC Fawcett – Tools To Manage Real Estate Business
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