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Flashcards in Mortgages Defined Deck (9)
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1

Mortgage Loan

Loan used by borrowers to either purchase a residual property using a purchase money mortgage or to refinance or replace that mortgage

2

Rate and Term Refinance

Allows them to lower the interest rate or change the duration of the loan (or both) IOT lower monthly payments

3

Cash out Refinance

Allows borrower to increase his loan amount by accessing or tapping into the equity in his property to use that cash for a number of reasons

4

Amortize

Loan pays itself off including the amount borrowed and the interest charge by the end of the loan term

5

PITI

Principal, interest, taxes, and insurance: most mortgages today also require that a borrower remit a portion of their annual property taxes and homeowners insurance (T&I)

6

Loan to Value (LTV)

If a home is valued at $100,000 and the mortgage loan is for $75,000 the LTV is %75. The remaining $25,000 is the borrowers equity and not subject to a mortgage lien.

7

Three (3) documents involved in taking out a mortgage loan

1. Deed: borrowers title (ownership) of property
2. The Promissory Note: promise to pay over a specified time at specified rate of interest.
3. Mortgage/Deed of Trust: creates a security interest and evidences a lien or encumbrance on the property.

8

Lien

legal claim of a lender against the property of a borrower to guarantee the repayment of debt

9

Deficiency Judgement

If funds recouped from a sale of a foreclosed home are insufficient to cover the debt, the borrower is still responsible for repayment.