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
Unroofed, paved area built adjacent to an apartment building or residence. ...
making land more beautiful to look at by adding improvements such as lawns, trees, and bushes. Increases the value of the property. ...
You’ve put your home on the market and are receiving offers. The next logical step is to sell your house to the buyer who offers you the highest amount of money and start the closing ...
A charge based on the asset value of a real estate security portfolio to manage it. For an open-end mutual fond, the management charge is included in the selling cost of the security. ...
Nonprofit charitable entity, such as one providing housing for the homeless. ...
A property title evidencing ownership such as provided in an abstract of title. There are no contingent liabilities or prior unresolved ownership claims. ...
A broad definition of termite clause is a provision in a contract for the sale of real property that gives the purchaser the right, at his or her expense, to have the property inspected for ...
Neighborhood square somewhat resembling a park. It is often owned by town or row house owners situated near the square. ...
Street terminating at one end with only one outlet. A dead end street is not a through street. See also cul de sac. ...
Have a question or comment?
We're here to help.