Shared Appreciation Mortgage (SAM)
Definition of "Shared Appreciation Mortgage (SAM)"
A type of equity participation loan where, in exchange for charging a below-market interest rate, the lender receives a predetermined percentage of a any increase in value of the property over a specified period of time. To illustrate, a lender who would otherwise charge 10% interest, might agree to take &% interest plus one-third of the appreciation of the property. For the lender, the money received from the appreciation of the property increases the effective yield on the investment. The borrower, by agreeing to share appreciation in property value gets a lower interest rate, which in turn reduces the monthly mortgage payment. A SAM is normally written so that at the end of the shared appreciation period, the property will be appraised and the amount due to the lender through appreciation is due at that time.
Popular Real Estate Terms
Rent that a comparable property would mandate in a given real estate rental market. Market rent is a competitive rate based on rents other comparable properties receive. For example, in a ...
Selling price for a property less assumed mortgages by the buyer. For tax purposes, the computation of the contract price is critical. ...
Transfer of the title of land, real estate, or personal property from one person or entity to another. This transfer is typically made via a trust deed, mortgage, sales contract or similar ...
Fluctuation in sales, profits, rat of return, etc. Likelihood of declining value. ...
Planned subdivision where detached housing is located in the close proximity to each other. Additionally, the subdivision shares common open space including parking and recreation areas. ...
Clause inserted into a commercial lease by a mortgagee stating the lessee's current lease will not be terminated if there is a foreclosure action against the landlord for the failure to ...
Direct line of descent as from father to son. An example of a lineal hereditament would be passing of the title of real property by virtue of a will to the first-born son. ...
Housing whose rental payments are reduced because of aid granted by the federal, state, or local governments, private enterprises, or individuals. For example, monthly rental payments for ...
person designating an agent to act for him. Primary individual having full financial liability. Amount being risked in a real estate investment. Owner of a real estate business. ...
Have a question or comment?
We're here to help.