Shared Appreciation Mortgage (SAM)
Definition of "Shared Appreciation Mortgage (SAM)"
A type of equity participation loan where, in exchange for charging a below-market interest rate, the lender receives a predetermined percentage of a any increase in value of the property over a specified period of time. To illustrate, a lender who would otherwise charge 10% interest, might agree to take &% interest plus one-third of the appreciation of the property. For the lender, the money received from the appreciation of the property increases the effective yield on the investment. The borrower, by agreeing to share appreciation in property value gets a lower interest rate, which in turn reduces the monthly mortgage payment. A SAM is normally written so that at the end of the shared appreciation period, the property will be appraised and the amount due to the lender through appreciation is due at that time.
Popular Real Estate Terms
To define access rights, we must understand the need for access rights. There are several reasons for using access rights for any property; some are necessary and granted with little to no ...
Property highly leveraged. An example is when a landlord buys an apartment house paying minimum cash payment down and the balance on mortgage. ...
The amount of money a developer must directly invest in order to obtain a development loan. It pays for the initial development cost including costs for items such as architectural plans, ...
(1) Provided by a commercial or savings bank to the real estate company itself or to another party for documentation purposes. Such a letter may be needed by a prospective condominium owner ...
Loan secured by the pledge of specific collateral. ...
Also called accounting or unadjusted rate of return. The return computed by dividing the anticipated future annual net income by the required investment in real estate. Sometimes the ...
When a person dies, a distribution of their estate takes place. The estate’s distribution is done through deeds depending on whether or not the deceased left a will. Two types of ...
A type of equity participation loan where, in exchange for charging a below-market interest rate, the lender receives a predetermined percentage of a any increase in value of the property ...
Shingles having uniform length, but random width. Random shingles give a creative appearance to a roof. ...
Have a question or comment?
We're here to help.