Part of learning about real estate is getting familiarized with its terminologies. What is collatera

What is a collateral mortgage? Well, today you're going to find out because that's the video that you clicked on. My name is Kris Krohn, this is Limitless Wealth TV and today we are going to our advanced vocabulary to break it all down for you. Alright my friends, advanced real estate vocab word of the day is collateral mortgage, right? So, you're obviously getting pretty deep in real estate if you're asking questions like this. If you're watching this video, I want to applaud you. It means that you're really going to a place where you really want to beat the information, you want to beat the system, you want to win because you're learning your vocabulary, you're learning what you need to know. Let's talk about collateral mortgage and first just talk about what is collateral. Let's say that you want to make an investment and the banks looking at you and thinking, oh man, we think Kris that you're a little bit of a risky bet for us. Can you put some collateral up? What's collateral? If I default on the loan, then it's money I'm going to have to owe them. For example, let's say that my car's paid off and they're like, great, we've got your vehicle as collateral and then my wife owns the Hope Diamond worth 2 million dollars, right? So, we've got that as collateral. What collateral really means is that if an investment goes south, then anything you put in as collateral, the bank can take from you. So, it can be a little scary. You got to make sure you're really confident in what you're doing. Well, a collateral mortgage is basically when you put up a home that still has a mortgage on it but it still clearly has equity and you're basically putting it up to the bank is like a promissory note. And basically saying, hey, I'm doing this other deal. But if anything goes south, then guess what? Then you get this home with this mortgage as collateral. So, by the way, I'm a huge fan of collateral. Because sometimes investments will say, hey, put up some extra money of security. And instead you can say, hey, how about I give you a promissory note saying, I promise I'm going to pay it. They're like, well, what's that worth? Well, take a look at some of my collateral. I've got this set, I got this asset, I got this asset. And all of a sudden, someone says, wow, if you're willing to put that on the line, then you must be confident. Understanding that lending money is always just a game of confidence. We're using ones and digits and numbers and credit scores and checking a look at your report to ultimately determine one word. Confidence. Can we have confidence in you? And when you put a collateral, here's what it tells people. You must be confident. Because if things go south, what do they get? They ensure that they have a way of getting their money back. Sometimes when an investment goes bust, people lose money. So, then they get the collateral and then they what? They make up. One more thing on this. Often certain investments are looking for a 2x on collateral. What does that mean? That means that I picked up $100,000 note with you. You gave me 100 grand and I'm now responsible to make payments and eventually give you your 100 grand back. But for you to feel comfortable giving me the money, I gave you $200,000 worth of collateral. Let's just say that it's a mountain property worth $200,000 and paid off. Well, the bank basically says, hey, we can always liquidate the mountain property at half off and get all of our money back. Okay? So, it's a security. It's securitizes. It produces security for them. It helps them feel comfortable and ultimately collateral goes hand-in-hand with confidence and security. And security means I feel more secure knowing that I've got more of your assets. So, if things go bad, then I can liquidate these and I can still get my money. Collateral mortgage just means that it's collateral tied to a specific piece of property. Listen, with all this language that you're learning, like you could probably put on a clinic and start schooling people on the words of finance and real estate. And good for you. You deserve to. Listen, that knowledge is power if you apply it. So, make sure that you're actually doing that. Now, if you want to know how best to apply that, subscribe. Ring the bell. You can do those 2 things if you haven't already. If you haven't, you're kind of crazy. Ring the bell. Do it right now. And then head on over the website so that you and I can jam on some of the other ways that we can get rocking in real estate right now.