Margin Of Security
Buffer amount between the value of the collateral and the principal balance of the obligation. For example, if the mortgage has a principal balance of $200,000 and the appraised value of the property is $250,000, the bank has a margin of security of $50,000 in the event of default. The greater the collateral value, the more protection the bank has. In troubled real estate markets because of adverse economic conditions, the market value of the property may fall substantially below the balance of the mortgage. Many homeowners in such a case have defaulted on the loan because of the decline in market values. For example, if the appraised value of a home has fallen to $60,000 while the mortgage balance is $100,000, it might be more financially prudent for the debtor to default on the mortgage.
Popular Real Estate Terms
Time period in which one may carry out a lien on property. ...
Individual making the payments in a mortgage or pledging a mortgage or property. ...
In real estate terms, many consider having corner influence an extra financial advantage when it comes to transactions in most cases. Usually, enjoying a corner influence brings an ...
An interest in property with the right o possession being postponed into the future until a certain even occurs. There are several possibilities where a future interest in property could ...
Combination of two or more real estate brokerages into one, with only one company retaining its identity. Typically, the larger of the two companies is the company whose identity is ...
Type of mortgage, which is not based on a constant interest rate. ...
Unglazed and natural clay or shale machine extruded into ceramic tile. Quarry tile is often used for factory flooring. ...
Selling lots of land for such reasons as building structure on them including homes, office buildings, and shopping centers. ...
(1) The transformation of a racially integrated neighborhood-bousing pattern into segregated housing. (2) Deterioration, destruction, or decay. ...
Have a question or comment?
We're here to help.