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North Shore Funding Blog

Hard Money Loans Defined
Hard Money Loans Defined: A hard money loan is a non institutional loan made by a private lender or private fund that typically lasts anywhere from 2 to 18 months and carries a higher APR than a traditional loan. Hard money loans carry a heavier burden and interest rate for the borrower for the si ...
(Posted: 12/2/2006 10:53:37 PM) Permanent Link
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New York City Real Estate Terminology

Brownstone 1 to 6 floors. No doorman. Constructed during the late 1800's and early 1900's as single family homes. A majority were converted during WW II to create multiple units, from three to ten apartments in each building. Brownstones commonly include high ceilings, detailed architecture, & wood ...
(Posted: 12/2/2006 10:53:29 PM) Permanent Link

Small Commercial Lending
Small commercial property owners have a new way to obtain a mortgage. What we call "out of the bank" small commercial lending allows for a mix between the traditional bank and the hard money lender. Such programs allow stated income and stated assets, high loan to values, and easier debt servicing c ...
(Posted: 12/2/2006 10:53:28 PM) Permanent Link
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Fannie Mae Explained
Fannie Mae and Freddie Mac reduce the costs of borrowers, who meet the underwriting requirements of the agencies, and who need loans no larger than the largest mortgage the agencies are allowed by law to purchase. For 2006 the maximum is $417,000. It is raised every year in line with increases in ho ...
(Posted: 12/2/2006 10:53:25 PM) Permanent Link
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Capitalization Rate
The Capitalization Rate or Cap Rate is a ratio that is used to estimate the value of income producing properties. In basic terms, the cap rate is the net operating income divided by the sales price as value of a property expressed as a percentage. ...
(Posted: 12/2/2006 10:53:23 PM) Permanent Link
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Commercial Loans
Commercial Financing is underwritten on a case by case basis. Every loan application is unique and evaluated on its own merits, but there are a few common criteria lenders look for in commercial loan packages. Financial Analysis A key component in making an underwriting evaluation is the debt c ...
(Posted: 12/2/2006 10:53:20 PM) Permanent Link
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Land Contract
An agreement for the sale of a property in which the buyer takes possession while making payments to the seller, but the seller holds title until full payment is made. This type of financing is usually done for people who have less than perfect credit and are having a hard time getting financed for ...
(Posted: 12/2/2006 10:53:11 PM) Permanent Link
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How Market Conditions Affect Interest Rates
When the Chairman of the Federal Reserve lowers "rates," he lowers the "Federal Funds" rate. It's the interest rate at which large banks lend funds to one another and is a "short-term" rate. Mortgage interest rates are long-term, up to 30 years. Longer-term interest rates are sensitive to expectatio ...
(Posted: 12/2/2006 10:53:04 PM) Permanent Link

Portfolio Loans
Portfolio loans are mortgages that are held as an investment by the lender. Usually they hold on to the loan because it doesn't fit the underwriting guidelines for investors on the secondary market. ...
(Posted: 12/2/2006 10:52:52 PM) Permanent Link
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1031 Exchange
A 1031 exchange is a vehicle that allows investors to avoid paying capital gains tax on the appreciation of a property when they sell. While you can avoid the taxes, there are certain things that you must do in order to stay within the guidelines of a 1031 exchange. ...
(Posted: 12/2/2006 10:52:40 PM) Permanent Link
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Non Warrantable Condos
Condominiums that DO NOT FIT into one of these three classes are considered NON-WARRANTABLE CONDO'S: CLASS I 1. Developers control of the homeowner's association has not yet terminated 2. Project may be subject to phasing or add-ons which have not yet been completed ...
(Posted: 12/2/2006 10:52:38 PM) Permanent Link

Patriot Act
The Patriot Act is a Federal law that was designed to try and stop or detour terrorist activities. This law effects real estate transactions by requiring identification disclosure requirements from banks, lenders, mortgage brokers, and escrow agents regarding transfer of title and deposits of cash. ...
(Posted: 12/2/2006 10:52:20 PM) Permanent Link
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For more information regarding this topic, please call Mike Williams at 516-921-9000 or email mwilliams@northshorefunding.com.