What Is a 125% Loan? A 125% loan is a type of leveraged loan, typically a mortgage used to refinance a home, which allows a homeowner to borrow an amount equal to 125% of their property’s appraised value. For example, if a home is worth $300,000, then a 125% loan would give the borrower access
What Is an 18-Hour City? Economists and real estate investors use the term 18-hour city to describe a mid-size city with attractive amenities, higher-than-average population growth, and a lower cost of living and cost of doing business than the biggest urban areas. The 18-hour city generally has a population of under one million, making it
What Is a 12B-1 Plan? A 12B-1 plan is a plan structured by mutual fund companies for the distribution of funds through intermediaries. 12B-1 plans provide mapping for the partnerships between distributors and intermediaries who help to ensure the sale of a fund. Sales commission schedules and 12B-1 distribution expenses are the primary components driving a
What Was the 1979 Energy Crisis? The 1979 energy crisis, the second of two oil price shocks in the ’70s, resulted in a widespread panic about potential gasoline shortages, and far higher prices for both crude oil and refined products. Oil output declined by only 7% or less, but the short-term supply disruption led to
What Is the 2011 U.S. Debt Ceiling Crisis? The 2011 U.S. Debt Ceiling Crisis was a contentious debate in Congress that occurred in July 2011 regarding the maximum amount of borrowing the federal government should be allowed to undertake. Key Takeaways The 2011 U.S. Debt Ceiling Crisis was one of a series of recurrent debates
What Is the 2000 Investor Limit? The 2,000 Investor Limit is a stipulation required by the Securities & Exchange Commission (SEC) that mandates a company that exceeds 2,000 individual investors, and with more than $10 million in combined assets, must file its financials with the commission. According to SEC rules, a company that meets these criteria
A 2-1 buydown is a mortgage agreement that provides for a low interest rate for the first year of the loan, a somewhat higher rate for the second year, and then the full rate for the third and later years. Key Takeaways A 2-1 buydown is a type of financing that lowers the interest rate
What Is the 3-6-3 Rule? The 3-6-3 rule is a slang term that refers to an unofficial practice in the banking industry in the 1950s, 1960s, and 1970s that was the result of non-competitive and simplistic conditions in the industry. The 3-6-3 rule describes how bankers would supposedly give 3% interest on their depositors’ accounts
A 3-2-1 buydown mortgage is a type of loan that starts out with a low interest rate and rises over the next several years until it reaches its permanent rate. Here is how 3-2-1 buydown mortgages work and how to decide if one is right for you. Key Takeaways With a 3-2-1 buydown mortgage, the
What Is a 401(a) Plan? A 401(a) plan is an employer-sponsored money-purchase retirement plan that allows dollar or percentage-based contributions from the employer, the employee, or both. The sponsoring employer establishes eligibility and the vesting schedule. The employee can withdraw funds from a 401(a) plan through a rollover to a different qualified retirement plan, a lump-sum payment, or
