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Negative equity is a deficit of owner's equity, occurring when the value of an asset used to secure a loan is less than the outstanding balance on the loan. [1] In the United States, assets (particularly real estate, whose loans are mortgages) with negative equity are often referred to as being "underwater", and loans and borrowers with negative equity are said to be "upside down".
For example, let’s say that your current mortgage loan balance is $360,000. But your home is only worth $300,000. In that case, you would have negative equity of $60,000.
For example, if you had an outstanding loan balance of $250,000 and your home appraised for $235,000, you’d have negative equity. It’s not a great state to be in.
A mortgage statement is a document containing the latest details about your loan, including your monthly payment. The law requires your mortgage lender or servicer to send you statements for each ...
The term balance sheet derives from an accounting equation that holds that assets must always equal the sum of liabilities plus equity. If asset prices fall below the value of the debt incurred to purchase them, then the equity must be negative, meaning the consumer or business is insolvent.
When determining if a whole-loan mortgage note would make a good investment in one's portfolio, one would need to consider the characteristics and circumstances surrounding the creation of the loan, the collateral or property securing the loan as well as the structure of the loan in conjunction with the borrower's financial background. [7]
This statement reflects profits and losses that are themselves determined by the calculations that make up the basic accounting equation. In other words, this equation allows businesses to determine revenue as well as prepare a statement of retained earnings. This then allows them to predict future profit trends and adjust business practices ...
HOEPA generally covers the following loan types (primary residences): Purchase mortgage. Refinance. Home equity line of credit (HELOC) and home equity loan. It doesn’t typically apply to ...