Effective Annual Yield
Definition of "Effective annual yield"
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The effective interest rate equals: in this discount loan the proceeds received is only $900,000, which effectively increases the cost of the loan. The effective annual yield, also called the annual percentage yield (APY). Different kinds of investments have different compounding periods. For example, some banks pay interest quarterly. If an investor wants to compare investments with different compounding periods, she must place them on a common basis. It is used for this purpose and is computed as follows.
Popular Real Estate Terms
Legal claim with enough basis in fact to have a lawsuit. ...
Founded in 1857 and located in Washington, DC, with over 54,000 members, throughout the United States, the AIA has 301 local groups in all 50 states. ...
The American Society of Appraisers, also referred to as ASA, is the largest voluntary membership, a multi-discipline trade association that stands for and promotes its appraiser members. ...
Payments made to enhance the appearance and conditions of real estate property. In so doing, the market value of the property should increase. Examples of renovation costs are siding, ...
Same as term development: Process of developing an area by planning and building homes, shopping centers, schools or churches. The development process includes the construction of streets, ...
The prepared form used to specify the terms of the listing contract. Usually a listing form consists of blanks the real estate agent fills in to provide the necessary information needed to ...
Approval given by a local municipality to construct a particular structure at a specific location. The permit may contain certain provisions that require builder compliance. ...
Person or business that obtains mortgages for others by finding suitable lenders. The mortgage broker sometimes deals with collections and disbursements. Typically the mortgage broker ...
A type of property coownership of two or more individuals to whom real property is deeded and who together have an undivided interest in it as a whole. There is only one title to the whole ...
Have a question or comment?
We're here to help.