Chapter 5 Finance Instruments

Chapter 5 Finance Instruments - Financing Residential Real...

Info iconThis preview shows pages 1–19. Sign up to view the full content.

View Full Document Right Arrow Icon
Financing Residential Real Estate Lesson 5: Finance Instruments
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction In this lesson, we will cover: types of finance instruments how they work common provisions
Background image of page 2
Promissory Notes Promissory note A written promise to pay money.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Promissory note A written promise to pay money. Maker – the one who makes the promise.
Background image of page 4
Promissory Notes Promissory note A written promise to pay money. Maker – the one who makes the promise. Payee the one to whom the promise is made.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Promissory note A written promise to pay money. Maker – the one who makes the promise. Payee – the one to whom the promise is made. Note – evidence of the debt and a promise to pay.
Background image of page 6
Promissory Notes A promissory note can be a brief and simple document. It usually contains: names of the parties, amount of the debt, interest rate, and how/when money is to be repaid. Basic provisions
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Promissory note must be signed by the maker. A legal description isn’t required. Basic provisions
Background image of page 8
Promissory Notes Promissory note must be signed by the maker. A legal description isn’t required. If promissory note meets certain requirements, it is a negotiable instrument. Right to receive payment can be transferred by endorsement. Basic provisions
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Negotiable instrument A written, unconditional promise, to pay a certain sum of money, on demand or on a certain date, payable to order or to bearer, and signed by the maker. Negotiability
Background image of page 10
Promissory Notes Without recourse” endorsement Issue of future payment strictly between maker and third party the instrument is endorsed to. I Original payee not liable if maker fails to pay. Without recourse
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Holder in due course Someone who buys a negotiable instrument: I for value, I in good faith, and I without notice of defenses. Even if maker has a defense against original payee, maker still required to pay holder in due course. Holder in due course
Background image of page 12
Promissory Notes Promissory notes are classified according to how principal and interest are paid off. Types of notes
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Promissory Notes Promissory notes are classified according to how principal and interest are paid off. Straight note periodic payments are interest only, with principal due on maturity date. Types of notes
Background image of page 14
Promissory Notes Promissory notes are classified according to how principal and interest are paid off. Straight note periodic payments are interest only, with principal due on maturity date. Installment note periodic payments include both principal and interest. Types of notes
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Summary Promissory Notes i Maker i Payee i Negotiable instrument i Without recourse i Holder in due course i Straight note i Installment note
Background image of page 16
Security Instruments In real estate transactions, a promissory note is accompanied by a security instrument: I Mortgage I Deed of trust Purpose
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Security instrument gives lender the right to foreclose on the property if borrower defaults. Purpose
Background image of page 18
Image of page 19
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/30/2011 for the course REAL 102 taught by Professor N/a during the Spring '10 term at City College of San Francisco.

Page1 / 156

Chapter 5 Finance Instruments - Financing Residential Real...

This preview shows document pages 1 - 19. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online