Exam Cram Vocabulary - Finance Flashcards
(84 cards)
A promissory with repayment
that is not sufficient to
amortize the loan over its
term; usually contains a
balloon payment at the end
PARTIALLY - AMORTIZED
INSTALLMENT NOTE
A document in which title to
a property is transferred to a
third party trustee as security
for a debt owed by the
trustor (borrower) to the
beneficiary (lender)
TRUST DEED
Holds bare legal title to
property as a neutral third
party where there is a deed
of trust used as secruity for a
loan
TRUSTEE
The interest held by the trustor (borrower)
or vendee
EQUITABLE
TITLE
A promissory note in which
payments of interest only are made
perdiodically during the term of the
note, with the principal payment
due in one lump sum upon maturity;
May also be a note with no
payments on either principle or
interest until the entire sum is due
STRAIGHT
NOTE
A note whose interest rate is
tied to a flexible index
ADJUSTABLE - RATE
MORTGAGE
The lender under a deed of
trust
BENEFICIARY
An agreement between a
property owner and the holder
of a trust deed or mortgage by
which the holder receives, as
security, the right to collect rents
from tenants of the property in the
event of default by the borrower
HINT: AOR
ASSIGNMENT
OF RENTS
A person who has obtained a
negotiable instrument (promissory note, check)
in the ordinary course of business
- before it is due,
- in good faith and for value, and
- without knowledge that it has been previously dishonored
and without notice of any defect or set off at the
time it is negotiated
HOLDER IN
DUE COURSE
A note that is fully repaid at
maturity by peridodic
reduction of the principal;
usually paid in equal
monthly installments
FULLY AMORTIZED
NOTE
The borrower under a deed of trust
HINT: T
TRUSTOR
A clause in a trust deed or
mortgage that gives the
holder the right to sell the
property in the event of
default by the borrower
POWER OF
SALE
Failure to pay a debt or
honor a contract
DEFAULT
Evidence of obligations to
pay money
SECURITY
Something of value given
as security for a debt
COLLATERAL
To give real proeprty as
security for a debt without
giving up possession
HYPOTHECATION
The transfer of property to a
lender as a security for repayment
of a debt.
The lender takes possession
of the property.
PLEDGE
Value remaining in a
property after payment of
all liens; the difference
between the amount that is
owed and the fair market
value
EQUITY
A mortgage on which the
interest rate varies according
to an agreed-upon index, varying upwards and downwards
thus resulting in a change
in the borrower’s monthly
payments
(VlRs or VMRs, Variable Mortgage Rates.) An interest rate in a real estate loan which by the terms of the note varies upward and downward over the term of the loan depending on money market conditions.
VARIABLE RATE
MORTGAGE
(VIR-VARIABLE INTEREST RATE)
(VMR-VARIABLE MORTGAGE RATE)
The right of the debtor,
before a foreclosure sale, to
reclaim property that had
been given up due to
mortgage default;
also known as right of redemption
EQUITY OF
REDEMPTION
Any written instrument that
may be transferred by
endorsement or delivery
NEGOTIABLE
INSTRUMENT
A written promise or order
to pay money; evidence of
a debt
PROMISSORY
NOTE
The use of borrowed money
to purchase proeprty
LEVERAGE
The party to whom a
promissory note is made
payable; the person
holding the note
HOLDER
