An income property appraisal technique where the overall rate of earnings is derived from weighting mortgage and equity rates. It provides insights into the true capital structure of a real estate investment and determines the overall rate of return required by investors.
The Housing Affordability Index is a statistical indicator that measures the ability of households in a specific area to purchase housing at prevailing prices using currently available financing. It typically compares the median household income to the required monthly payment for a median-priced home in the same area.
Housing Starts are a vital economic indicator that measures the number of new residential construction projects that have begun within a specified period. This figure provides insights into economic conditions and trends within the housing market.
The Mortgage Constant is derived by dividing the total annual mortgage debt service, including both principal and interest, by the initial loan amount. It provides a useful way of calculating the annual cost of a loan as a percentage, making it easy to compare different mortgage options.
The prime rate is the lowest commercial interest rate charged by banks on short-term loans to their most creditworthy customers. It significantly influences other rates, including those for mortgages and consumer loans.
A rate guarantee, also known as a locked-in interest rate, ensures that the interest rate on a mortgage loan will not change for a specified period, even if broader market interest rates fluctuate during that time.
