It may sound either redundant or contradictory, but “cash equity” is a thing (we promise).
Cash equity is your home value minus your mortgage balance. For instance, if your home is worth $100k and the balance left on your mortgage is $50k, you have a cash equity of $50k in your house.
What’s that? Housing prices in your area just went up, and now your house is worth $130k? Now you have $80k cash equity. Sweet.
Cash equity isn’t just important to homeowners; it’s also important to real estate investors. There are cash equity markets where big financial institutions play around with cash equity capital in the stock market. Hopefully, the values of real estate aren’t inflated, or else we could end up with another crash-and-recession.
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Finance: What is a second mortgage?4 Views
Finance allah shmoop What is a second mortgage Okay you
know what a first mortgages it's otherwise cleverly named what
is called it is called oh yeah Mortgage it's Just
a loan on a house You paid four hundred grand
for this baby Hundred grand down two hundred fifty grand
in a first mortgage And they're still fifty grand You
owe well where's that fifty large coming from the bank
wouldn't loan you any more on a first mortgage that
was costing you six percent a year Tio you know
to rent that money So you had to get a
second mortgage which should things go awry and you become
a statistic Well that's it's fully behind the first mortgage
in the priority stack of payback So in a bankruptcy
situation the first mortgage first what's called a first mortgage
get it fully paid along with any fees associated with
it and back interest accrued and any other things that
are associated with that first mortgage it stands in line
first in priority Then any cash leftover gets attributed to
that second mortgage So not surprisingly second mortgage money costs
a lot more to rent then first mortgage money because
the risk of non payment in a bad situation is
meaningful E higher especially when the borrowed does this for 00:01:25.136 --> [endTime] a living
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