Glosario

Income property is any property where the owner is not living in it and is making money from it. A home that was once owner occupied can become an income property if the owner moves out and then turns a profit with it somehow. There are many different ways a property can become an income property. One of the most popular ways for a place to become what is considered an income property is for it to become a rental property. People, who are not listed on the deed, live in the home and pay a set amount of money each month to live there. Depending on the type of building and the location, it could also be rented out to a business. Of course, not all of the money collected is profit. There could be liens against the income property and other expenses that bite away at the actual profit amount.

The ability of a person to borrow money, or buy goods by paying over time. Credit is extended based on a lender’s opinion of the person’s financial situation and reliability, among other factors.

Homeowners who have a significant amount of equity in their property may want to consider a cash-out refinance. This type of loan allows borrowers to refinance more than they currently owe on their residence. During closing, the original loan balance is paid off, and the homeowners then receive a check for the remaining balance. These individuals are free to use the money however they choose, but the most common reasons for undergoing a cash-out refinance is to make home improvements or consolidate other bills. A cash-out refinance could occur if the Jones family currently owe $125,000 on their residence, which has a fair market value of $150,000. Mr. and Mrs. Jones could borrow $150,000 against the property. Upon doing so, $125,000 would be used to pay off the first mortgage, and the remaining $25,000 would be paid to them in cash.

An all-cash deal refers to any transaction where cash is exchanged for an asset. The buyer offers the seller cash and there is no use of financing to purchase the asset or any other means, such as an exchange of stock. An all-cash deal is usually completed through checks or wire transfers as opposed to an actual exchange of physical cash. An all-cash deal is primarily used in the purchase of real estate but can also occur in the purchase of a company.