Buy down loans, Financial Management

The buy down loan is similar to the PAM; however, it is the seller of the property and not the buyer/borrower who places cash in a segregated account so that additional amounts required may be drawn and paid along with the mortgage payments made by the borrower. The pledged account is created by the seller out of his profits as in the absence of such pledged account, the borrower may not be eligible for any kind of loan. The amount that the seller pledges is a direct reduction of the sale proceeds for him and the borrower uses the seller's money without himself having to repay this amount to the seller. Though, theoretically this cost incurred by the seller may be inbuilt in the price by increasing it, the mortgage lender may not allow it. Buy down loans are arranged by sellers who are anxious to sell their property. 

Posted Date: 9/8/2012 7:40:04 AM | Location : United States







Related Discussions:- Buy down loans, Assignment Help, Ask Question on Buy down loans, Get Answer, Expert's Help, Buy down loans Discussions

Write discussion on Buy down loans
Your posts are moderated
Related Questions
Put Option This is a right which is granted in exchange for an agreed-upon sum to sell property. Options are mostly used frequently in securities transactions it also used stoc

Illustrate the comparison between equity and debt Equity and Debt: A Comparison 1. Equity shares don't carry any fixed charges on them. If company doesn't generate positiv

Financial Management and Materials Department The materials management is of utmost importance in a manufacturing firm and covers the areas such as procurement, storage, mainte

TC  Shipping Ltd has decided to purchase a machine to augment the company's installed capacity to meet the growing demand for its products. There are three machines under considera

State the Example to calculate the present value 2, 00,000 $ is the amount which you require after 20 years for your retirement. How much must you invest now at 5% per annum co


Q. Causes of Risks 1) Wrong decision of what to invest in. 2) Wrong timing of investments. 3) Nature of instruments invested such as shares or bonds, chit funds, benefit

Q. Representation of generator winding? The notation using subscripts is such that VAB is the potential at point A with respect to point B, IAB is a current with positive flow

Why do we focus on cash flows instead of profits when evaluating proposed capital budgeting projects? We focus on cash flows at the place of profits when evaluating proposed ca

Q. Long and short dated volatility? 1. If an investor purchase long-dated volatility as well as sells short-dated volatility then the investor is expecting a decrease in the sh