|
|
Accredited Investor
An accredited investor is a person or institution that the Securities and Exchange Commission (SEC) defines as being qualified to
invest in unregistered securities, such as privately held corporations, private equity investments, and hedge funds.
The qualification is based on the value of the investor’s assets, or in the case of an individual, annual income.
Specifically, to be an accredited investor you must have a net worth of at least $1 million or a current annual income of at least $200,000 with the anticipation you’ll earn at least that much next year. If you’re married, that amount is increased to $300,000.
Institutions are required to have assets worth $5 million to qualify as accredited investors. The underlying principal is that investors with these assets have the sophistication to understand the risks involved in the investment and can afford to lose the money should the investment fail.
|
|
Mortgage
A mortgage, or more precisely a mortgage
loan, is a long-term loan used to finance the purchase of real estate.
As the borrower, or mortgager, you repay the lender, or mortgagee, the loan principal plus interest, gradually building your equity in the property.
The interest may be calculated at either a fixed or variable rate, and the term of the loan is typically between 10 and 30 years.
While the mortgage is in force, you have the use of the property, but not the title to it. When the loan is repaid in full, the property is yours. But if you default, or fail to repay the loan, the mortgagee may exercise its lien on the property and take possession of it.
|
|
|
