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Three Deadly Sins of Delaware Statutory Trusts - by Daniel Goodwin - Provident 1031

Article on Feb 1, 2023

3 Deadly Sins of Delaware Statutory Trusts

DSTs can be highly attractive to real estate investors, but it’s imperative to temper expectations and consider the big picture...

Daniel Goodwin
Published by Kiplinger

How Not To Screw Up A 1031 Exchange - by Daniel Goodwin - Provident 1031

Article on Dec 30, 2022

How To Not Screw Up A 1031 Tax-Free Exchange

How To Not Screw Up A 1031 Tax-Free Exchange Without question, real estate is one of the very best ways...

Daniel Goodwin

Article on Dec 22, 2022

How a DST Solved One Landlord’s Million-Dollar Problem

Considering that 10,000 Americans turn 65 every day in America, 1031 Exchanges and Delaware Statutory Trusts (DSTs) are entering a...

Daniel Goodwin
Published by Kiplinger

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Glossary Definitions

qualifying ratios

Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The “top” or “front” ratio is a calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The “back” or “bottom” ratio includes housing costs as will as all other monthly debt.

purchase money transaction

The acquisition of property through the payment of money or its equivalent.

purchase agreement

A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

public auction

A meeting in an announced public location to sell property to repay a mortgage that is in default.

promissory note

A written promise to repay a specified amount over a specified period of time.

private mortgage insurance (MI)

Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

principal, interest, taxes, and insurance (PITI)

The four components of a monthly mortgage payment on impounded loans. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.

principal balance

The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

principal

The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

prime rate

The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.

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