Chapter 35 - Qualifying the Buyer Flashcards
Appraisal
A professional estimate or opinion of the value of a piece of property or parcel of land, as of a certain date, that’s supported by an objective, or pertaining to appraising and related functions, such as appraisal practice or appraisal services
Conventional Loan
A loan that is not insured or guaranteed by the federal government
Credit History
A record of debt repayment, detailing how a person paid credit accounts in the past as a guide to whether he or she is likely to pay accounts on time and as agreed in the future
Debt
Any recurring monetaray obligation that will be cancelled (eg. monthly bills)
Debt-to-income Ratio
The relationship of a borrower’s total monthly debt obligations, including housing and long-term debts with 10 or more payments remaining, to income, expressed as a percentage ( Total Debt / Income = Ratio)
Housing Expense Ratio
The relationship of a borrower’s total monthly housing expense to income, expressed as a percentage (Total Housing Expense/income = Ratio)
Income
The money one receives from a job, investment, or other use of skills or captial
Loan-to-value Ratio
The relationship between the unpaid principal balance of the mortgage and the appraised value (or sales prices if it is lower) of the property
Mortgage
An instrument that creates a voluntary lien on real property to secure repayment of a debt.
Multiple Listing Service
a listing service whereby local member brokers agree to share listings, and agree to share commissions on properties sold jointly
PITI
Principl, interest, taxes and insurance; a typical mortgage payment
Pre-Approval
Process by which a lender determines if potential borrowers can be financed through the lender, and for what amount of money
Pre-Qualification
The process of determining how much money a propective homebuyer might be eligible to borrow; it is not a guarentee
