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When the buyer either sells or refinances the property, all mortgages are paid off in full, with the seller entitled to the difference in the payoff of the wrap and any underlying loan payoffs. Typically, the seller also charges a spread. For example, a seller may have a mortgage at 6% and sell the property at a rate of 8% on a wraparound mortgage.
The seller could choose which security documents (mortgage, deed of trust, land sales document, etc.) to best secure his/her interest until the loan is paid. If the property sells for a substantial profit, the seller can spread the resulting capital gain over multiple years, usually reducing the overall tax burden by turning the transaction ...
A due-on-sale clause is a clause in a loan or promissory note that stipulates that the full balance of the loan may be called due (repaid in full) upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to call the note due in such a circumstance.
A clause in a purchase agreement that gives buyers and sellers the right to cancel a contract if certain terms aren't met. For example, a mortgage contingency requires the buyer to secure a ...
Typically, when the seller accepts the buying party’s signed offer or counteroffer and communicates that acceptance to the buyer, a binding agreement has been reached — in theory.
An acceleration clause is a section of a mortgage contract that can have big consequences: Namely, it can require you to pay off your entire mortgage at once. Even if you miss only one payment.
A 72-hour clause, typically inserted in real estate sale contracts, is also known as an escape clause, release clause, kick-out clause, hedge clause or right of first refusal clause. [1] The 72-hour clause is a seller contingency which allows the seller to accept a buyer's contingent offer to purchase his/her property, while allowing the seller ...
The sale of land is governed by the laws and practices of the jurisdiction in which the land is located. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases (rental contracts) cover such rentals since they typically do not result in recordable deeds.