Chapter 14: Financing; Conventional, FHA and VA loans. Key Terms Part 1 Flashcards Preview

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Flashcards in Chapter 14: Financing; Conventional, FHA and VA loans. Key Terms Part 1 Deck (15):
1

Adjustable rate mortgage

A plan with interest rate changed either up or down periodically.

2

Amendatory clause

This states that a buyer getting an FHA loan can resend the contract if the appraisal is lower than the purchase price.

3

Amortization schedule

Listing of each payment: interest, principal paid, remaining debt.

4

Amortized loan

The repayment plan including principal payments gradually; reduces debt.

5

Assumable

This means a mortgage can be taken over by the next buyer.

6

Biweekly mortgage

This is a repayment plan, equivalent of 13 monthly payments per year. It saves more on interest that I conventional 30 year mortgage.

7

BPO

The written estimate of value by real estate license.

8

loan-to-value ratio. LTV

The amount of a mortgage loan in relation to the value of a home.

9

Budget loan

A loan with monthly payments including property taxes and insurance.

10

Buy down

The payment of extra points in return for lower interest rate.

11

Cap

A percentage beyond which interest rate cannot be raised at an adjustment. On a variable rate mortgage this is the Are the most that they can charge.

12

Ceiling

The highest interest rate ever allowed on a specific adjustable loan.

13

Certificate of reasonable value

The VA appraisal statement.

14

Federal housing administration (FHA)

The US agency that insures mortgages to protect lending institutions.

15

FHA 203(b)

This is known as a low down payment in shored mortgage loan.