Effective Annual Yield
Definition of "Effective annual yield"
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The effective interest rate equals: in this discount loan the proceeds received is only $900,000, which effectively increases the cost of the loan. The effective annual yield, also called the annual percentage yield (APY). Different kinds of investments have different compounding periods. For example, some banks pay interest quarterly. If an investor wants to compare investments with different compounding periods, she must place them on a common basis. It is used for this purpose and is computed as follows.
Popular Real Estate Terms
Many homebuyers or real estate investors only think of mortgages when it comes to financial aid in real estate purchasing. Lately, with the increasing desire of homebuyers to not be ...
The deposit given by a buyer of property is delivered to the escrow agent, who retains it for the seller. ...
Generally speaking, a moratorium covers a provisional or limited activity suspension. Temporary financial troubles or funding constraints can trigger issuing a lull. This postponement lasts ...
Limited period of time granted by state law to an individual who has had his or her property foreclosed on and sold to regain possession of the property by repaying the debt that was ...
If “image is everything”, then home staging is the most important and effective process in a real estate sale. But what is home staging? Well, when real estate agents are ...
Six-mile-wide column of land running north-south in rectangular survey system ...
A lien that makes property security for the repayment of debt. Mortgages can finance the acquisition of real estate such as a home. A mortgage has certain benefits compared to other debt ...
The company is not responsible to a third party if an account or financial instrument is dishonored by the debtor. The creditor's recourse is solely to the debtor's property. An example is ...
Penalty charge in order to cure a previous wrong. ...
Have a question or comment?
We're here to help.