1. Conventional Loans- No government guarantees or insurance (Minimum down payment of 20%).
2. Conventional Insured Loans- No government guarantees of insurance, but insurance from private insurance companies. 

Private Mortgage Insurance (PMI) is insurance provided by a private insurer that protects the lender against loss in the event, of a foreclosure and deficiency. Insurance is required for all loans with less than 20% down payment.

Largest private insurer is M.G.I.C (Mortgage Guarantee Insurance Corporation). 

The amount a lender will loan is generally based on the appraised value for loan purposes or the sale price, whichever is lower. The lender is concerned with the value of the property, income and return of investment. 

California mortgage financing alternatives:

• Syndicate Equity Financing: Syndicates offer small investors the opportunities to invest in high-yield real estate.
• Commercial Loan:A straight bank loan that the borrower obtains based either on good credit or some NON-real property collateral.
• Bonds or Stocks: Some large corporations sell stocks or general obligation bonds so that they may buy real property without a mortgage.
• Long-Term Lease:A good approach if the property is usable as is; 100% of rent being deductible as expense; and tenant's total debt load remains the same;
• Exchange:Basically, a trade of properties (provided that the properties are not mortgaged AND the trade involves NO financing).
• Sale-Leaseback (purchase-lease, sale-lease, lease-purchase or leaseback): A situation in which a property owner sells his parcel of property, but then leases it BACK from the purchaser, so that the original owner retains possessory rights. 

Sales Contract (Land Contract, Installment Sales Contract, Agreement to Convey, Agreement for Purchase and Sale, Land Sale Contract, or Land Contract of Sale): the seller, or vendor, agrees to convey the title to the real property after the BUYER, or vendee, has met certain named conditions, and which does NOT require conveyance within ONE YEAR. 

Under an installment sales contract, the seller becomes the LENDER.

Congratulations! You've already finished another (albeit brief!) chapter, and it's time for the Chapter 15 Quiz. We'll see you in Chapter 16, where we'll discuss the Mortgage Loan Broker Law.

Click here if you would like to open this summary as a pdf, which you can then print or save to your device: Chapter 15 Summary