|
|||||||||
» Profile and Preferences
» Cashflow Tool
» Property Alalyzer
» Tutorials
» Invite Your Contacts
» My Domus Blog
Investment Glossary of TermsCashflowA revenue or expense stream that changes a cash account over a given period. Cash in-flows arise from activities such as - financing, operations, investing - though they also occur as a result of donations or gifts in the case of personal finance. Cash out-flows result from expenses or investments. This holds true for both business and personal finance. EquityThe value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates. AppreciationAn increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time. Prepayment PenaltyA clause in a mortgage contract that says if the mortgage is prepaid within a certain time period, a penalty will be assessed. Closing CostsThe numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, deed-recording fee and credit report charges. Also known as "settlement costs". Subprime LendingSubprime lending, also called B-paper, near-prime, or second chance lending, is the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. The term also refers to paper taken on property that cannot be sold on the primary market, including loans on certain types of investment properties and certain types of self-employed individuals. Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, poor credit history, and adverse financial situations usually associated with subprime applicants. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime borrowing comes with a higher interest rate than for borrowers with good credit ratings, as the risk of default is much higher. Niche BanksBanks that cater to and serve the needs of a certain demographic segment of the population. Niche banks typically target a specific market or type of customer, and tailor a bank's advertising, product mix and operations to its target market's preferences. Wet LoanA mortgage in which the funds are obtained before all required documentation is completed. Wet loans allow the borrower to purchase property in a more timely fashion and complete the required paperwork after the transaction. Conditions surrounding the use of wet loans differ based on state laws. Junk FeesNebulous charges assessed at the closing of a mortgage that go to the originator or lender but serve little function. These fees are hidden in the mortgage documents and are usually assessed as raw dollars rather than "points" or a percentage of the loan. Junk Fees may or may not pay for an actual service to the borrower, but they typically are not known to the borrower prior to signing. Some common fees that may be considered junk fees include signup fees, funding fees, translation fees and messenger fees. Intermarket AnalysisThe analysis of more than one related asset class or financial market to determine the strength or weakness of the financial markets or asset classes being considered. Instead of looking at financial markets or asset classes on an individual basis, this type of analysis looks at several strongly correlated markets or asset classes such as stocks, bonds and commodities. Product DifferentiationA marketing process that showcases the differences between products. Differentiation looks to make a product more attractive by contrasting its unique qualities with other competing products. Successful product differentiation creates a competitive advantage for the seller, as customers view these products as unique or superior. Soft MarketA market that has more potential sellers than buyers. A soft market can describe an entire industry, such as the retail market, or a specific asset, such as lumber. This is often referred to as a buyer's market, as the purchasers hold much of the power in negotiations. |
|||||||||
 |
Wikipedia says...