real estate finance - full book (500 pgs)

This unsteady flow of funds is disruptive to their

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Unformatted text preview: 8467 11.9420 8.4085 8.4999 8.5915 8.6835 8.7757 8.8682 8.9610 9.0541 9.1474 9.2410 9.3348 9.4289 9.5232 9.6178 9.7126 9.8077 9.9029 9.9984 10.0941 10.1900 10.2861 10.3824 10.4790 10.5757 10.6726 10.7697 10.8669 10.9644 11.0620 11.1598 11.2577 11.3558 11.4541 11.5525 11.6511 11.7498 Dynasty School (www.dynastySchool.com) 9-5 REAL ESTATE FINANCE ALTERNATIVE MORTGAGE INSTRUMENTS (AMI) As mentioned earlier in “Types of Mortgages”, the alternative mortgage instrument (AMI) is one of the two basic types of mortgage instruments. (The other type is the standard mortgage instrument. ) The alternative mortgage instrument is the type of mortgage in which at least one of the four basic mortgage characteristics varies. The importance of AMIs has grown in the last few years because the increase in home prices has meant that fewer persons can qualify for housing. In the past, AMIs were thought to be a creative method of financing the real estate transaction, but today they are becoming the standard. The AMI is becoming more common in the real estate industry as interest rates continue to increase and/or funds for real estate financing become less available. The most important factor that makes this type of mortgage appeal to the lender is that it allows the lender's return from the mortgage to keep up with the prevailing interest rate. It appeals to the borrower because many of the AMIs allow the borrower to quality for a larger mortgage amount, by making the initial monthly payments lower and increasing them over a specified time as the borrowers income increases. Some of the more common AMIs and many of the newest AMIs will be discussed in this chapter. ADJUSTABLE RATE MORTGAGES In the 1970s over 50 different types of instruments were developed for financing with variable terms. These included the variable interest rate loan, roll–over mortgage, renegotiable rate mortgage, graduated payment mortgage, adjustable mortgage loan, and adjustable rate mortgage. Of these, the ARM has emerged t...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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