1. AMITY UNIVERSITY, UTTAR PRADESH
AMITY SCHOOL OF ARCHITECTURE & PLANNING
Jatin Garg
B.Plan (2011-15)

2. Overview
Only a small percentage of the purchase
price of real estate is normally provided
from the savings of the purchaser, the
other financial sources has been divided
into three common categories :-
(1) primary sources
(2) financial middlemen
(3) other sources

3. Primary Sources
 Savings and Loan Associations
 a financial institution that specializes in
accepting savings deposits and making
mortgage and other loans.
 By law, S&L Association can have no more
than 20% of their lending in commercial
loans; their focus on mortgage and
consumer loans makes them particularly
vulnerable to housing downturns

4.  Commercial Banks
 a type of retail bank that provides services, such as
accepting deposits, giving business loans and basic
investment products.
 In terms of total assets, the more than 14,500
commercial banks are the largest financial
intermediaries directly involved in the financing of real
estate. Commercial banks act as lenders for a
multitude of loans. While they occasionally provide
financing for permanent residential
purchases, commercial banks` primary real estate
activity involves short-term loans, particularly
construction loans (typically six months to three years)
and to a lesser extent home-improvement loans. Most
large commercial banks have a real estate loan
department

5.  Life Insurance Companies
 Insurance companies play an important role as
providers of capital for real estate from an owner
standpoint. Unlike the savings and loan
association or the bank, which normally deals
directly with the borrower, the 1,800 insurance
companies typically do their lending through local
correspondents, either mortgage brokers or
mortgage bankers. Insurance companies
normally specialize in large-scale projects and
mortgage packages.

6.  Mutual Savings Banks
 A mutual savings bank is a financial institution
chartered by a central or regional government,
without capital stock, that is owned by its
members who subscribe to a common fund. From
this fund claims, loans, etc., are paid. Profits after
deductions are shared between the members.
The institution is intended to provide a safe place
for individual members to save and to invest
those savings in mortgages, loans, stocks, bonds
and other securities and to share in any profits or
losses that result.

7. Financial Middlemen
 Mortgage Brokers
 A mortgage broker is a person who serves to bring together the user of
capital(borrower or mortgagor)and the provider of capital (lender or
Mortgagee). For this service, a finder`s fee equal to one percent or so of
the amount borrowed is normally paid by the borrower. The financial
success of the mortgage brokerage firm depends upon the ability to
locate available funds and to match these funds with creditworthy
borrowers.
 Mortgage Bankers
 Mortgage bankers normally make mortgage loans, package these loans
and then sell these packages to both primary lenders and secondary
investors. Financial help is often sought from a lender, typically a
commercial bank. The bank becomes a warehouse for mortgage money,
and the mortgage banker draws on these mortgage funds until payment
is received from the investors. Usually the mortgage banker continues to
service the loan (collect debt service, pay property taxes, handle
delinquent accounts, etc.) even after the loan has been packaged and
sold

8.  Other Sources
 Capital Market (Shares)
 Retained Earnings
 Borrowings
 Government Sources (Leasing)
 Business Expansion Scheme Funds