Frequently Asked Questions

 

What is Equity?

  • The interest of the owner in a property over and above all claims against the property. It is usually the difference between the market value of the property and any outstanding encumbrances.

What is Debt-Service-Ratio?

  • The percentage of the borrower’s gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.

What is an Appraisal?

  • The process of determining the value of the property, ususally for lending purposes. This value may or may not be the same as the purchase price of the property.

What is a Mortgage?

  • The legal contract made between a lender and a borrower that uses property as collateral to secure the loan.

What is a Second Mortgage?

  • A mortgage loan secured against an asset with a pre-exisiting mortgage (first mortgage).

What is Loan-to-value Ratio?

  • The loan amount divided by the appraised value of the security pledged.

What is a Syndicated Mortgage?

  • A mortgage in which there is more than one person with an interest. Each person’s interest is proportionate to the money they have lent to the borrower.

What is an interest-only mortgage?

  • Mortgage that requires the borrower to pay interest only on the principal in monthly installments for a fixed period of time.

What is the minimum investment?

  • $150,000 for direct investments.

How do I receive funds?

  • As interest payments and principal repayments are made by the borrower, KV Capital will make deposits directly (via EFT) to your bank account or via mailed cheque.