lesson 5: the financing environment

Question 1

the law of agency

Answer 1

The legal environment in real estate transactions

Question 2

whoa re the two parties in the law of agency?

Answer 2

principal and agent

Question 3

when does the financing environment exist?

Answer 3

when a buyer does not have sufficient cash to purchase the property in question

he resorts to his bank to obtain a mortgage to cover the portion that is missing

Question 4

whats a mortgage?

Answer 4

term used for a loan on a real estate transaction

Question 5

what is a name Loan-To-Value ratio?

Answer 5

a mortgage

The loan expressed as a percentage

the mortgage value that the bank is willing to give you

Question 6

mortgage payments

Answer 6

Usually refer to monthly installments made to your bank in order to reduce your outstanding loan and eventually pay it off entirely

Mortgage Payment = Interest portion + Principle portion

Question 7

how do you calculate principle portion on a mortgage payment?

Answer 7

Principle portion = Mortgage Payment – Interest portion

Question 8

Mortgage Loan Balance

Answer 8

The portion of the loan that is still outstanding at any point in time

Mortgage Loan Balance = Mortgage Loan – Principle portion

Question 9

Outstanding Loan Balance

Answer 9

Refers to mortgage loan balance