A lender can be a private individual, a private or public group, or an institution that loans funds to a person or business that the lendee would later repay with interest in most cases. In real estate, a lender is most often the bank that provides the mortgage so that the buyer can purchase the house.
The meaning of a lender is someone who gives money to help another person make an acquisition. The borrower doesn’t have the money, so he appeals to the lender, and together they enter into a contract. Within the terms of the agreement, it specifies how the lendee will restore the funds, the interest rates for those funds, the period of the loan as well as the repercussions of missed payments. In case the terms of the contract are not respected, the lender can appeal to a collection agency in order to retrieve the funds, or they can claim possession of the acquisition under the terms of the loan. This is the reason why knowing how much money you can afford to borrow is fundamental.
There are two types of lenders: individual and business. The same goes for the borrowers.
Individual lenders
When an individual is looking for a loan, the lender always takes into account the borrower’s credit history as well as checking the credit score. By analyzing these, the lender can determine whether or not the individual borrower can manage the payments required without tightening their financial situation too much. Lenders implement and use this system because any lender takes a risk when granting a loan. The information available to them at the time of the loaning process helps them to assess the creditworthiness of the borrower and ensure that they will recover the loan.
Business lenders
When it comes to credit unions, savings and loans, and banks, they can offer Small Business Administration (SBA) programs, but they are always required to respect the SBA loan guidelines. However, other private institutions that provide loans have their own basis for lending money. Some of the information that small-business owners are required to present when they are looking for a loan are balance sheets, liabilities, and the net worth of the business and individual. The private institutions are more particular when it comes to lending money and can also require more detailed information about the business-like, the purpose of the venture, the location of the establishment, projected sales, projected growth, etc.
Popular Real Estate Terms
A building having one house hold on the first floor and a second household on the second floor. ...
Tax term describing current and necessary business expenses. Ordinary and necessary business expenses do not include long-term capital losses. For example, the XYZ stationary store deducts ...
Site where mobile homes are located. Mobile home parks are often mandated by municipal zoning laws. They provide necessary utilities to the mobile homes often including recreational ...
A lease requiring tenants to pay all utilities, insurance, taxes, and maintenance costs. ...
The first mortgage on property when other mortgages exist as well, as in the case of a wraparound loan. For example, the total amount financed might be %200,000 of which the first lien is ...
Glass containing wire support to make it stronger. There is less chance of glass being broken into pieces and hurting people. ...
Additional tax liability that the IRS deems to be owed by a taxpayer. A taxpayer can argue the correctness of a deficiency with the IRS. There can be an appeal to the Tax Court without ...
Clause in a mortgage that allows the borrower to pay more than the monthly amount and to retire the loan early without a penalty. ...
Body o law relating directly to condominiums and cooperative developments. Most property law provides vertical ownership of property in the sense that property owners own mineral rights as ...
Have a question or comment?
We're here to help.