lesson 5: the financing environment Flashcards

1
Q

the law of agency

A

The legal environment in real estate transactions

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2
Q

whoa re the two parties in the law of agency?

A

principal and agent

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3
Q

when does the financing environment exist?

A

when a buyer does not have sufficient cash to purchase the property in question

he resorts to his bank to obtain a mortgage to cover the portion that is missing

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4
Q

whats a mortgage?

A

term used for a loan on a real estate transaction

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5
Q

what is a name Loan-To-Value ratio?

A

a mortgage

The loan expressed as a percentage

the mortgage value that the bank is willing to give you

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6
Q

mortgage payments

A

Usually refer to monthly installments made to your bank in order to reduce your outstanding loan and eventually pay it off entirely

Mortgage Payment = Interest portion + Principle portion

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7
Q

how do you calculate principle portion on a mortgage payment?

A

Principle portion = Mortgage Payment – Interest portion

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8
Q

Mortgage Loan Balance

A

The portion of the loan that is still outstanding at any point in time

Mortgage Loan Balance = Mortgage Loan – Principle portion

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9
Q

Outstanding Loan Balance

A

Refers to mortgage loan balance

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