real estate sheet for exam

real estate sheet for exam - Ch2 Housing demand factors:...

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Ch2 Housing demand factors: area demographics, expected future income, investment needs, change in household structure AI : Mortgage pmt/monthly income <2 low, <1 unaffordable Real estate cycle: Boom: Presale price>spot price Crisis: fewer transactions Depression: Spot price & presale price decrease, Long transaction period Recovery: spot price>presale price Ch3 1)GEM(growing equity) Fixed r monthly income rises by a predetermine rate annually Ads: shorter home free period, less int, lower r Dis: the increase in monthly pmt may outstrip the increase in salary of the borrower, results in a heavy burden or even default. 2)RPM(rapid-pmt) short loan period, similar to conventional ads: less int, lower r 3)biweekly mortgage annual r/26 ads: less int, lower r 4)GPM(graduated pmt) pmt rise by a predetermined rate every year for an agree upon amount of time Ads: allows owner to acquire a more expensive home Dis:-ve amort 5)elastic mortgage(HK only) if prime r ^, either extend loan period or increases monthly pmt 6) SAM(shared appreciation) RE developers lender offer lower r, but borrower need to share the price appreciation or profit with the lender ads: ability to share in any property appr. dis: prop. val may not appreciate for long time Ch4 Overcollateralization (125-400%) Reason: 1)default, 2)prepay early, 3)delay pmt Mark-to-market maintain market value of mortgages at an agreed lvl if fall below, need to replenish the pool with more same quality mortgage if fail to do so, trustee liquidate the pool
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This note was uploaded on 05/15/2011 for the course FINA 805 taught by Professor Maurice during the Spring '11 term at CUHK.

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real estate sheet for exam - Ch2 Housing demand factors:...

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