Dry Loan
The ink on the mortgage papers is now dry. Everything was signed. Okayed. Made coolio. Annnnnd then it's time for the money to be transferred.
That is, a dry loan is one wherein the papers are all dry and signed and documented before any money goes... anywhere.
Why would you want a dry loan? Well, if you're a bank, you'd love one, because they take away a lot of the risk that the buyer lied on her application or that some key disclosure (like that meth arrest in Rio in '16) wasn't made, which would otherwise kill the chance of the loan happening under the terms that were originally given.
Related or Semi-related Video
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
Up Next
What is a mortgage? A mortgage is a loan on property. Obviously not many individuals, or companies for that matter, can or want to pay cash for the...
An interest-only mortgage is a mortgage on which you only pay the rent on money borrowed, rather than on the principal.
What are the components of a mortgage payment? Mortgage payments generally consist of (4) components acronymed as PITI: Principal, Interest, Taxes,...