What does Leverage mean?
In real estate, leverage refers to the use of borrowed money or other forms of financing to purchase property. A buyer can use leverage to acquire a property with a smaller down payment, by borrowing a larger portion of the purchase price. The more leverage a buyer uses, the greater the potential return on investment (ROI), but also the greater the potential risk, because a fall in the value of the property could lead to the borrower owing more than the property is worth.
Related Terms
Non-Recurring Closing Costs
Sweat Equity
Blue-Ribbon Condition
Prepaid Interest
Occupancy Cost
Borough
Principle of Conformity
Restructured Loan
Abstract of Judgment, Law
Cash-On-Cash Return (C on C)
English Tudor Style
Prepaid Expenses
Right To Recission
Interest Rate Buy-Down Plans
Exclusive Listing
Fair Credit Reporting Act.
Conservator
Rate-Improvement Mortgage