A swap is a contract. It is based on a derivative (like a bond or loan). The two parties can trade their cash flows and liabilities from more than one type of fiscal instruments. A lot of swaps include cash flows that are based on the notional principal amount like bonds or loans.
Frequently Asked Questions
What is a Real Estate Swap?
A house swap is when two people or families swap their homes for a short period of time. This means that they can take advantage of the benefits of having a home without the costs of renting one.
Can I swap my house instead of selling?
It is possible to swap houses instead of selling or buying another home. There are even websites where you can list your property for a home swap.
How do you swap a house?
Although swapping houses can be agreed between owners, if a mortgage is involved both owners will need to qualify for their own new mortgage. This would be a typical Selling / Buying transaction requiring regular property deed and mortgage deed (we need to clearly inform people that swapping is between both vendors, from a legal and lender point of view it’s a selling/buying transaction)