Chapter 13: Types of Mortgages and Sources of Finance Flashcards Preview

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Flashcards in Chapter 13: Types of Mortgages and Sources of Finance Deck (33)
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1

The FHA does not make loans. Instead, it ______ loans.

insures

2

FHA section ______ is the original program for insuring loans.

203(b)

3

FHA loans are underwritten in _____ increments.

$50

4

UFMIP (______) is paid at the time of closing, but may be financed.

up-front mortgage premium

5

An FHA insured mortgage must include the right to _______ without penalty.

prepay

6

A _______ mortgage is one in which the payments in the first few years are lower than necessary to repay the loan, which results in negative amortization.

graduated payment

7

true/false: FHA loans may be used to finance condominiums.

true

8

In order to receive a VA loan, a ______ is obtained from the VA.

certificate of eligibility

9

FHA loans _____ have a maximum loan amount and _____ require a downpayment.

does
does

10

A VA loan _____ have a maximum loan amount, and _____ require a downpayment.

does not
does not

11

PMI (Private Mortgage Insurance) is required when the LTV ration exceeds ______.

80%

12

If a balance is due at the end of a loan term, it's called a _____.

balloon payment

13

In an ARM, the _______ is a percentage added to the index rate to cover the lender's overhead and provide a profit.

margin

14

The date when interest rates can change in an ARM is the _______.

rate adjustment date

15

The amount of time between rate adjustment dates is the ______.

rate adjustment period

16

Most ARMs have both a _____ cap and a _____ cap.

payment
lifetime

17

Construction loans are paid in ______ at specific stages of development.

draws

18

A _______ is a mortgage obtained from the seller.

PMM

19

A ______ mortgage is interest-only payments.

term

20

A ______ mortgage includes both real and personal property as security for the loan repayment.

package

21

_______ is the term used to describe the flow of deposits into lending institutions.

Intermediation

22

_____ occurs when depositors bypass traditional depository institutions or withdraw money.

Disintermediation

23

_________ is the most abrupt tool the FED has for regulating money.

Reserve requirement

24

The _______ is the least effective of the FED's tools to regulate money.

discount rate

25

_______ is the most effective method tool the FED has for controlling the flow of money.

Open market operations

26

______ are financial institutions which originate loans.

Mortgage bankers

27

_____ do not make loans. Instead, they arrange loans by matching up lenders with lendees.

Mortgage brokers

28

Regarding Savings Associations, time deposits are another word for ______ accounts and NOW accounts are ______ accounts.

savings
checking

29

The ______ regulates federal savings associations.

Office of Thrift Supervision (OTS)

30

The ______ isures savings associations' depositors up to $250,000.

Savings Association Insurance Fund (SAIF)