Capital (Part 3 of 4)
This set of 4 videos will give you a super quick overview of the 4 C’s of Real Estate Financing: Credit, Collateral, Capital, and Capacity. Take a look! Please contact me if you have any real estate questions.
Hello! Welcome to Portlandrealestate.realestate! I’m Robert Thompson with Keller Williams. This is the third of four “2-Minute Tidbit” videos in this Real Estate Financing Series. The first two videos in the series were Credit (click to watch) and Collateral (click to watch). The last will be Capacity.
Capital, today’s “C” is a two-part concept. The first is the capital you’re putting into the transaction: are you putting down 0%, 3.5%, 20%…? The down payment, i.e. the ‘skin in the game’, plays a big part in determining your interest rate.
The second part of Capital is how much money you have in the bank. Not all loans have a requirement for reserves in the bank, but some do. And it is certain that no bank is ever going to complain about you having reserves. (By the way, retirement accounts, etc. usually count when determining this).
Real Estate Financing – Capital