 Sam
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Joined: 21 May 2005
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Location: CALIFORNIA
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 Posted: Thu Apr 15, 2004 1:12 am Post subject: Hangout |
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Hangout is the principal mortgage balance remaining on a leased property, when the term of the loan extends beyond the period of the lease.
For example, a bank gives a loan to a borrower for 15 years on a property that the borrower has leased out to a farmer for 10 years. The loan balance at the end of 10 years is the hangout. Suppose the loan balance at the end of 10 year period is $125,000. Now the bank assumes that the value of the property will be higher than $125,000 at the end of the 10 year term. As a result the bank will consider minimal risk in granting the loan. |
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