Tri-Party Agreement

DEFINITION of 'Tri-Party Agreement'

A business agreement between three separate parties. In the mortgage industry, a contract involving the buyer, the primary lender plus a construction lender. This type of contract is commonly used to secure bridge loans for the construction of a home or other real estate.

BREAKING DOWN 'Tri-Party Agreement'

Tri-party agreements extend credit for construction to the buyer from the construction provider. The provider in turn holds the property as collateral. The primary lender will then pay off the construction loan and assume full liability for the loan upon completion of the construction.

RELATED TERMS
  1. Postnuptial Agreement

    A contract created by spouses after entering into marriage that ...
  2. Silent Second Mortgage

    A secondary mortgage placed on an asset that is not disclosed ...
  3. Option Agreement

    1. A signed agreement between an investor who is seeking to open ...
  4. Tri-Star

    A type of candlestick pattern that signals a reversal in the ...
  5. Confidentiality Agreement

    A legal agreement between two or more parties that is used to ...
  6. Gentleman's Agreement

    An unwritten agreement or transaction backed only by the integrity ...
Related Articles
  1. Economics

    What's a Memorandum Of Understanding?

    A memorandum of understanding, or an MOU, is a written legal agreement.
  2. Bonds & Fixed Income

    What is an Indenture?

    An indenture is a legal and binding contract between a bond issuer and the bondholders.
  3. Term

    What are Mutually Exclusive Events?

    In statistics, mutually exclusive situations involve the occurrence of one event that does not influence or cause another event.
  4. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  5. Entrepreneurship

    10 Public Companies That Rely On Govt. Contracts

    We look at 10 of the top public companies whose businesses rely on U.S. government contracts.
  6. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  7. Entrepreneurship

    Lockheed Martin Is Tight With The US Government

    The relationship between Lockheed Martin and the U.S. government is long-standing and the company's biggest revenue source, but it may be deteriorating.
  8. Home & Auto

    ‘Turnkey’ Properties: A Sensible Investment?

    Turnkey properties can make sense - for people who want a real estate investment without truly being in the real estate business.
  9. Economics

    Understanding Covenants

    A covenant is a term placed in a loan that requires the borrower to either maintain or refrain from certain business activities.
  10. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
RELATED FAQS
  1. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  2. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>
Hot Definitions
  1. Short Selling

    Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is ...
  2. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  3. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  4. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  5. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  6. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center