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
Most people seem to be baffled by the fundamental terminology in real estate: brokers vs. agents vs. employing brokers vs. mortgage brokers, etc. Let us provide some clarity! The primary ...
Public record in an assessment district listing the assessed valuation of all its assessed property. ...
Outline or diagram of a structure or group of structures used for planning purposes. ...
Prepayment to a landlord for refurbishing the unit beyond what would be anticipated from customary wear and tear. It is like a damage deposit. The security deposit may be refunded at the ...
The legal description of property is a legal instrument to determine as best as one can, the physical boundaries and characteristics of a plot of land and the housing built on top of it. ...
Interest in real property that exists when a tenant remains in possession of leased premises or a "hold over" after his right to possession has ended. In a tenancy at sufferance, a tenant ...
A type of property coownership of two or more individuals to whom real property is deeded and who together have an undivided interest in it as a whole. There is only one title to the whole ...
CE Shop has become a widely used and popular term in real estate. But what does it mean? “CE” stands for continuing education, and in the real estate business, it implies a ...
Conifer wood, such as pine and redwood. ...
Have a question or comment?
We're here to help.