Inflation Equity
Definition of "Inflation equity"
Increase in the value of property caused by inflation. For example, John buys a home for $150,000. Because of inflation, the home is worth $200,000 five years later. The inflation equity in the home is $50,000($200,000-$150,000). Inflation equity may be used to acquire a second mortgage or a home equity loan; however, the lender risks losing its equity collateral if the housing market experiences a slowdown and the home's value recedes back to its uninflected equity value.
Popular Real Estate Terms
The meaning of a disclosure statement is a legal document signed by both parties, the lender and the borrower or buyer. This statement outlines the terms and conditions, the potential ...
Effective Age is the counterpart to a property’s Actual Age. While the former refers to the date a property was built, the latter is more of a sensorial depiction of its age; the age ...
Commitment by a lender to a borrower for a given amount of money at specified terms for the financing of a project. The borrower pays a fee for the privilege of either executing the loan or ...
What’s the definition of real estate collateral? Could we say it’s like keeping a hostage? No, that would be relatively insensitive. But the idea is similar. In real estate, ...
A lien is a legal instrument by which one party – usually lenders and creditors - guarantees the obligation of a real estate owner to do something – generally repays the money. ...
Typically, the term rider defines a financial concept, implying a written modification applied to an insurance policy, altering its initial clauses and provisions. The rider can update the ...
Member of a partnership whose liability for partnership debts is limited to the amount invested in the partnership. A limited partner is prohibited from taking active part in the management ...
Mortgage on both the purchased real estate and personal property of a durable type. The entire amount financed is considered one mortgage. In residential real estate, a builder might ...
Short-term leases are leases that run its completion in a faster time than regular ones.In real estate, short term-leases usually refer to temporary housing; that is: rent.The length of a ...
Have a question or comment?
We're here to help.