Kaplan Professional - Financing Secrets of a Millionaire Real Estate Investor - 2003

Kaplan Professional - Financing Secrets of a Millionaire Real Estate Investor - 2003

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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the pub- lisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent pro- fessional person should be sought. Vice President and Publisher: Cynthia A. Zigmund Editorial Director: Donald J. Hull Senior Managing Editor: Jack Kiburz Interior Design: Lucy Jenkins Cover Design: Design Alliance, Inc. Typesetting: Elizabeth Pitts 2003 by William Bronchick Published by Dearborn Trade Publishing A Kaplan Professional Company All rights reserved. The text of this publication, or any part thereof, may not be repro- duced in any manner whatsoever without written permission from the publisher. Printed in the United States of America 030405060710987654321 Library of Congress Cataloging-in-Publication Data Bronchick, William. Financing secrets of a millionaire real estate investor / William Bronchick. p. cm. Includes index. ISBN 0-7931-6820-1 ( 7.25 × 9 pbk.) 1. Mortgage loans—United States. 2. Secondary mortgage market—United States. 3. Real property—United States—Finance. 4. Real estate investment—United States—Finance. I. Title. HG2040.5.U5B767 2003 332.7 22—dc21 2003000057 Dearborn Trade books are available at special quantity discounts to use for sales pro- motions, employee premiums, or educational purposes. Please call our Special Sales Department, to order or for more information, at 800-621-9621, ext. 4404, or e-mail [email protected]
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v C ONTENTS 1. Introduction to Real Estate Financing 1 Understanding the Time Value of Money 2 The Concept of Leverage 2 Owning Property “Free and Clear” 5 How Financing Affects the Real Estate Market 6 How Financing Affects Particular Transactions 7 How Real Estate Investors Use Financing 8 When Is Cash Better Than Financing? 9 What to Expect from This Book 10 Key Points 10 2. A Legal Primer on Real Estate Loans 11 What Is a Mortgage? 11 Promissory Note in Detail 12 The Mortgage in Detail 14 The Deed of Trust 15 The Public Recording System 15 Priority of Liens 16 What Is Foreclosure? 17 Judicial Foreclosure 17 Nonjudicial Foreclosure 18 Strict Foreclosure 19 Key Points 19 3. Understanding the Mortgage Loan Market 21 Institutional Lenders 21 Primary versus Secondary Mortgage Markets 22 Mortgage Bankers versus Mortgage Brokers 23 Conventional versus Nonconventional Loans 25 Conforming Loans 25 Nonconforming Loans 28
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vi CONTENTS Government Loan Programs 28 Federal Housing Administration Loans 29 The Department of Veterans Affairs 30 State and Local Loan Programs 31 Commercial Lenders 31 Key Points 32 4. Working with Lenders 33 Interest Rate 33 Loan Amortization 34 15-Year Amortization versus 30-Year Amortization 36 Balloon Mortgage 37 Reverse Amortization 38 Property Taxes and Insurance Escrows 38 Loan Costs 39 Origination Fee 39 Discount Points 39 Yield Spread Premiums: The Little Secret Your Lender Doesn’t Want You to Know 39 Loan Junk Fees 40
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This note was uploaded on 03/23/2010 for the course INSY INSY434 taught by Professor Oh during the Winter '10 term at McGill.

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Kaplan Professional - Financing Secrets of a Millionaire Real Estate Investor - 2003

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