A Building Loan Agreement is a contract where the lender advances funds to the property owner at specific construction milestones, ensuring continuous cash flow during various construction stages such as foundation completion and framing.
A deed in lieu of foreclosure is a legal process where a borrower voluntarily transfers the ownership of property to a lender to satisfy a loan that is in default and avoid foreclosure proceedings.
An Early Repayment Tax Clause is a provision in a loan agreement that allows the borrower to repay the loan early if changes in relevant tax legislation increase the amount of interest payable.
A grace and notice provision gives borrowers extra time to make required payments or comply with loan terms before being classified as in default in a loan agreement.
The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal. It also refers to the earning rate for deposits held in a financial institution.
A late charge is a fee charged by a lender when the borrower fails to make a timely payment on their loan or credit account.
An individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest, creating debt in the form of loans. Lenders are paid off before stockholders in the event of corporate liquidation.
A loan is a financial transaction where a lender provides property, typically money, to a borrower, who promises to return the property with interest after a specified period.
A detailed understanding of a mortgage commitment helps both borrowers and lenders formalize the loan process and prepare for property transactions.
A mortgage note is a legal document that states the names of the borrower and lender, the amount borrowed, the interest rate, repayment terms, and other loan provisions. While the mortgage pledges the property as collateral, the mortgage note outlines the debt and the repayment requirements.
An Open-End Mortgage refers to a type of mortgage under which the borrower can borrow additional funds from the lender, typically up to a specified ceiling.
Reconveyance is a process in which a lender transfers the title of a property back to the borrower once the mortgage debt is fully paid off. This legal document ensures the borrower's ownership of the property is unencumbered by the lender’s lien.
A secured liability is a debt against which the borrower has pledged sufficient assets as collateral to protect the lender in case of default.
A mutual effort by a property owner and lender to avoid foreclosure or bankruptcy following a default. It generally involves a substantial reduction in the debt service burden during an economic downturn.
