Ownership interest in property that is above the minimum need to meet uncertainties or a downward trend in a real estate market.
Equity in property
Amount by which the appraised value of property exceeds the debt balance. If property has a fair market value of $500,000 while the mortgage balance is $200,000, the owner's equity in the property is $300,000.
Equity kicker
Privilege of a real estate investor or lender to participate in the profitability generated from property, in addition to any principal, interest or dividends.
Equity lending
Bank financing to a homeowner based on his dollar equity in the home. If a home is worth $500,000 and the owner owes $200,000, his equity is $300,000.
Equity mortgage
Financing of a home based on how much equity the homeowner has in it.
Equity of redemption
Borrower's right to redeem his property by immediately paying off the loan balance and any related costs.
Equity participation
Lender has an equity interest in the property that is the subject of the loan. This is in addition to principal and interest payments on the mortgage. The lender shares in the increase in market price of the property as well as any net income generated.
Equity purchaser
An individual or business that buys someone else's equity in property but may not assume any responsibility for a loan balance.
Equity rate of return
Return before taxes on the capital invested in real estate property.
Equity reit
Type of real estate investment trust (REIT) whose investment money is used for the purchase of a portfolio of specific properties to be managed in order to generate investment return through current income and capital gain.
