All posts by Joe

Equity Grabbing

Equity grabbing refers to the unethical practice of lenders who give out predatory loans to gullible borrowers with the hidden intention of acquiring ownership of the borrower’s equity in a property when default occurs.

This means that the lender’s strategic agenda was not to make a profit from interest in the first place but to include terms in the lending contract that can induce default when invoked, then proceed with acquisition of equity based on that premise.

The most common terms that causes defaults in future are usually associated with sudden interest rate spikes, especially with teaser rate loans. read more

Annual Cap

An annual cap is a provision clause contained in a adjustable rate mortgage (ARM)loan contract which limits the potential increase of interest rates within the year.

This rate increase limit is often stated in the loan agreement in terms of percentage points.

For example, a cap of 1% on an ARM currently at 3% would mean that the maximum interest rate would be 3% + 1% which equates to 4%. This applies even when the current market rate for new home loans is 6%. read more

Package Mortgage

A package mortgage is a loan for home buyers that is not just made up of funds to purchase a house, but also consist of money to buy household items like furniture as well.

However in such cases, personal property bought with funds from the package mortgage would also be pledged as collateral for the loan.

The special feature of these types of home loans can be especially attractive for home buyers who don’t have a lot of savings but has strong cash flow. read more

Pros And Cons Of Blanket Mortgage

A blanket mortgage is a real estate loan that covers more than a single parcel of land.

This allows investors and developers to manage a single mortgage even though they have multiple properties to finance.

A blanket loan enables them to pay a single scheduled payment with terms that covers all the properties under that blanket. read more