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 amount of inherent risk for a mortgage in granting a mortgage. An operating principle in mortgage risk rating is that the mortgage cannot exceed 2.5 times the mortgagor's annual income, ...
Lien on a given property, such as an person's house as a collateral for a loan. ...
Legal status conferred by certain states on a homeowner's principal residence. In certain states, homestead status may provide protection against creditor claims or forced land sales ...
Cost of the standard unit of area that is used to measure a parcel of real estate. Commercial property rentals are generally quoted on the basis of square foot cists. For example, a ...
Same as term higher and best use: Use of a parcel of land that will produce the greatest current value. ...
Land subject to an easement. ...
Commercial building having several different uses blending together. For example, retail shops are on the first floor, professional offices are on floors two through ten, and a restaurant ...
Provision at the end of a document, such as a will, wherein the witnesses sign that the instrument has been executed before them. This may be useful involving transfers of real estate. ...
Out-of-state or out of jurisdiction administrator appointed to probate a decedents property when there is no executer or executrix. ...
Have a question or comment?
We're here to help.