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 landowner may not divert or redirect a natural occurring waterway from his or her property causing damages to another property. Waterway is normally construed to mean streams and rivers ...
Buyer who is acting in good faith, is not aware of any outstanding claims or rights of others to the property, and has given valuable consideration as part of the business transaction. ...
Fee a borrower is assessed for the right to make a loan payment before the due date. An example is the prepayment charge for paying-off a mortgage early. ...
A property title evidencing ownership such as provided in an abstract of title. There are no contingent liabilities or prior unresolved ownership claims. ...
A public foreclosure sale where public notice is given anyone is allowed to participate. Normally, a public sale occurs because of the property owner's failure to pay taxes. ...
The cost of property, such as a home owned for tax purposes. For example, a home was purchased for $150,000. capital improvements to it cost $15,000. The house was later sold for $230,000. ...
The angle of a roof in relation to its horizontal axis expressed as a ratio of inches (cmm) per foot of horizontal distance. The sloping of ground, such as sloping ground away from the ...
Style of home emphasizing symmetry and balance. ...
Bank financing to a homeowner based on his dollar equity in the home. The interest rate typically fluctuates such as being based on the change in the prime interest rate. Interest expense ...
Have a question or comment?
We're here to help.