Chapter 14: Financing; Conventional, FHA and VA loans. Key Terms Part 2

Question 1

Index

Answer 1

A guy to national mortgage trends, used for adjustable mortgage rates.

Question 2

Interest

Answer 2

A charge for the use of other peoples money.

Question 3

Loan to value ratio

Answer 3

The percentage of a properties market value that maybe borrowed.

Question 4

Margin

Answer 4

The percentage charged by a lender above the index rate.

Question 5

New Jersey Housing and Mortgage Finance Agency (NJHMFA)

Answer 5

The agency that offers below market interest loans, with low or no down payment, to qualified buyers to purchase homes in urban target areas, located mainly in inner-city.

Question 6

PITI (Principle, Interest, Tax and Insurance reserves)

Answer 6

A mortgage payment including interest, amortization and certain expenses.

PITI (Principle, Interest, Tax and Insurance reserves)

Question 7

Point

Answer 7

A 1% calculation of the loan amount, charged as extra upfront interest when the loan is made.

Question 8

Private mortgage insurance (PMI)

Answer 8

Insurance protection for the lender on a low down payment mortgage loan. Usually well under the standard 20% down payment.

Question 9

Straight loan

Answer 9

A mortgage with payments of interest only.

Question 10

Target area

Answer 10

Neighborhoods in which the state wishes to strengthen housing stock. Part of the NJHMFA….New Jersey housing and mortgage financing agency.

Question 11

VA mortgage

Answer 11

A loan guaranteed by the federal government for veterans and their spouses.