Green Door Funding

The rate that international banks dealing in Eurodollars charge each other for large loans. Some domestic banks and other lenders use this rate as an index for adjustable rate mortgages.

May also be known as a junior or subordinate loan. This is a secondary financing that is sandwiched between a senior (first mortgage) loan and the property owner’s equity. Collateral for the mezzanine loan can be a second mortgage or assignment of the partnership interests.

A short term loan used to enable purchases or refinancing where longer term, more conventional financing is unavailable.

A real estate development that contains two or more different uses all intended to be harmonious and complementary. An example would include a high-rise building with retail shops on the first two floors, office space on floors three through ten, apartments on the next ten floors, and a restaurant on the top floor.

A loan that requires the personal liability of the Borrower. Upon a default, a Lender may seek to recover the property pledged as collateral to satisfy a debt, and the Lender will have recourse to other assets of the Borrower. The opposite is a non-recourse loan.

The lowest commercial interest rate charged by banks on short-term loans to their most credit-worthy customers. The prime rate is not identical to the long-term mortgage rate. Mortgage rates are generally higher than the Prime Rate.

Yield Maintenance is really a prepayment penalty that allows the lender to attain the same return or “yield” as if the borrower had made all scheduled mortgage payments until maturity. Yield maintenance premiums, though different between lenders, are designed to protect the lenders “yield” should a borrower prepay the loan. Lenders use these formulas to insure that they will not lose money when the loan is paid prior to the loan's maturity.

Green Door Funding clients are often faced with a dilemma: Should they refinance now and pay a significant yield maintenance penalty, or should they wait until the penalty disappears, hope that rates are still attractive and then refinance?

There is a very interesting solution to this dilemma—the “Forward Commitment”. Often, with Green Door Funding’s assistance, it is possible to lock interest rates even though the closing will not occur for a number of months after initially applying for a mortgage, thereby allowing clients to lock the lowest possible interest rate now, and minimize prepayment penalties.