Explain term Buydown Loans with examples?

Q: c) Does every loan, which consists of an initial outlay followed by a sequence of re- ceipts, have a…

A: A loan can be defined as the financial support received from the lender by the borrower. In…

Q: In what way does leverage increase the riskiness of a loan?

A: The advantage a financial specialist or investor gets from utilizing debt is called financial…

Q: Explain Second Mortgages and Shorter Maturities?

A: It is a type of mortgage loan which is similar to a mortgage loan which is tenable by a borrower's…

Q: State the advantages of long-term debt financing.

A: Long Term Debt Financing: It refers to the debt financing required by the firm which usually has a…

Q: Define mezzanine loan?

A: Mezzanine funding: Mezzanine funding is a type of funding that has together the characteristics of…

Q: Explain The Need for an External Interest Rate?

A: There is a strong need for the external interest rate because it helps in making financial…

Q: Define mortgage securitisation , with a relevent example?

A: Mortgage is a loan agreement between the borrower and the lender, in which the property or real…

Q: Explain Determinants of Mortgage Interest Rates?

A: Following are the determinants of Mortgage Interest Rates: Credit score: Banks and HFCs see the…

Q: What is maturity matching approach (for short-term financing)?

A: This approach states that the maturity of company’s assets and liabilities should be coordinated to…

Q: Explain Mortgage-Equity Approach?

A: Mortgage-Equity Approach: It has advanced for quite a while. It is a numerical technique, in view of…

Q: Explain the Factors Important in Mortgage Loan Pricing?

A: Mortgage loan pricing: The process of analysis and arriving at the exact interest rate for a…

Q: What are some types  of current assets that are pledged as security for short-term loans?

A: A pledged asset is collateral pledged by a borrower to a lender (usually in return for a loan). The…

Q: Explain constant amortizing mortgage (CAM)?

A: It is otherwise called an amortizing mortgage, is one where the principal and monthly interest…

Q: Explain the term Mortgage-Equity Capitalization?

A: The mortgage equity capitalization technique is not a technique which is that commonly used. However…

Q: Define syndicated loan

A: Syndicated loans are type of loans that are provided for projects that involve huge sum for a single…

Q: Explain the term Fixed Interest Rate Mortgage (FRM) Loan?

A: Mortgage loans:   The mortgage is a type of loan in which a property or any other real estate is…

Q: Illustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?

A: Interest received It is the amount that is received to a person for the investment made. A rate at…

Q: Explain the reason why the wraparound lender should be willing to make the loan at a rate that is…

A: Wraparound mortgage is a type of secondary financing in which the seller extends an additional…

Q: Explain GPM Mortgage Loans and Effective Borrowing Costs

A: Graduated-payment contract (GPM) loans: It may be a sort of fixed-rate mortgage in which…

Q: How can we determine the borrowing rate of return?

A: The borrowing rate of return is the return that is charged on the borrowings made by the firms or…

Q: Explain mezzanine loan?

A: Mezzanine financing is a blend of both debt and equity financing. It is a way for firms to raise…

Q: When is debt financing more attractive than equity financing?

A: Debt refers to the amount borrowed by one party from another party, This arrangement of borrowing…

Q: Define the Convertible Mortgages with example?

A: A convertible mortgage is a loan which starts as an adjustable rate mortgage and can be changed into…

Q: Explain Hybrid and Mortgage REITs?

A: Introduction: REITs enables a corporation to buy a real estate property using the collective…

Q: State the disadvantages of long-term debt financing.

A: Long term debt refers to the debt that has a maturity period of more than 1 year.They are also…

Q: Explain Collateralized mortgage obligations (CMOs)?

A: Collateralized mortgage obligation is referred to as complex debt security  that directs the…

Q: Define aggressive approach (for short-term financing)

A: The aggressive approach is a high-risk strategy of working capital financing wherein short-term…

Q: how FHA buydown loans are structured?

A: Buydown loan is a type of loan in which lower interest rate is charged to the buyer. In such type…

Q: how collateralized mortgage obligations (CMOs) help to alleviate some of the reinvestment and…

A: Mortgage is a type of debt instrument which is generally secured by collateral. A borrower has to…

Q: Explain Incremental Borrowing Cost versus a Second Mortgage?

A: The lenders offer different repayment terms of the same loan to the different borrowers. The term of…

Q: Is Collateralized debt obligation a good investment? Please explain in details.

A: A collateralized debt obligation also known as a CDO is a complex structured credit product which is…

Q: Define Amortized loans

A: Loan is an amount borrowed by an individual from an individual, company, bank or any financial…

Q: Explain equity participation loans?

A: Equity participation loans refer to the situation where the owner or lender will reduce the interest…

Q: Explain ARM and Floating Rate Loans?

A: Adjustable-rate mortgage (ARM): It could be a kind of contract or mortgage where the coupon rate…

Q: What are some advantages and disadvantages of short-term versuslong-term debt?

A: Debt is an amount which is borrowed by the firm. When the maturity of debt is up to one year, it is…

Q: Which loan should Spike take and why?

A: Simple interest method is a method of computing interest on borrowed amount where interest is…

Q: What are the advantages and disadvantages ofusing short-term debt as a source of financing?

A: Short-term debt: It is a kind of debt that is repaid in a small span of time or within a year. The…

Q: Explain ARMs and Floating Rate Loans?

A: Loan is referred as the amount which is borrowed from the financial institutions or individual at…

Q: Explain the effective lending rate (ELR) and how it is derived?

A: ELR is generally used to know the true cost of lending. This concept is useful when be borrow money…

Q: Explain Reverse Annuity Mortgages (RAMs) loan?

A: Reverse Annuity Mortgage (RAMs): A reverse annuity mortgage is a kind of home loan in which an…

Q: is the potential impact of long-term borrowing?

A: Long-term borrowings: Long term borrowings help companies to attain their long term financial…

Q: Discuss some of the most elementary terms used in fixed interest rate loans?

A: A loan is referred as the borrowed amount which is procured by the borrower from various financial…

Q: Explain Partially Amortizing, Constant Payment Mortgage (CPM) Loans with example?

A: Amortization can be defined as paying back of the loan amount in installments according to the…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.