Mortgage Loans For Real Estate Flipping

Author: sunshine

Love might make the world go 'round, but it's financing that makes real estate deals spin like a top. It may be a sweeping generalization, but true nonetheless, that if you don't succeed at obtaining financing, you won't succeed as a real estate investor.

In this artical you'll learn about different types of loans and the kinds of conditions that may accompany them. You also learn a little about the different types of lenders who can finance your deals.

Every business and profession has its own special jargon, and real estate is certainly no exception. Let's start with the term, "mortgage." You go to the bank or to some other lender to get money in the form of a mortgage loan or mortgage financing, evidenced by a mortgage note. In return for their largesse, you give the lender a lien against the property, called a mortgage or mortgage deed or deed of trust.

There are many types of mortgage loans as well as many conditions that may be included in the mortgage note. The most common structure is the level-payment, amortizing loan. The note for such a loan is comprised of four basic terms: Principal amount, Term, Interest rate, Periodic Payment.

Conventional Mortgage Loan: A loan obtained from an institutional source, such as a bank or insurance company.

Nonconventional mortgage loan: A loan obtained from a private source, such as the seller of the property.

Conduit loans: Conduit loans are an important part of the commercial finance industry, but they're not for beginners.

Graduated payment mortgage: A loan in which the monthly payments begin well below what would be necessary for a level-payment, amortizing loan, an amount that is not even sufficient to cover the interest that should accrue with each payment.

Wraparound mortgage:
Wraparound mortgage is a type of loan that might be suitable for seller financing. In this transaction the seller has an existing mortgage on the property. Instead of paying this loan off, he or she "wraps" a new loan around it-that is, creates a new, larger loan that is subordinate to the existing first mortgage.

Article Source: http://www.articlesbase.com/real-estate-articles/mortgage-loans-for-real-estate-flipping-820666.html

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