N6 Financing

Question 1

Leverage

Answer 1

Using borrowed money to increase the rate of return.

Question 2

Promissory Note

Answer 2

Evidence of Debt.

Question 3

The promissory note is ____ usually recorded.

Answer 3

NOT

Question 4

The document that hypothecates real property as security for a debt .

Answer 4

Mortgage or Deed of Trust

Question 5

The mortgage or deed of trust is usually recorded to establish ________ of the lien.

Answer 5

priority

Question 6

The document that names the property as collateral and includes a legal description.

Answer 6

Mortgage or Deed of Trust

Question 7

Fully Amortized Loan

Answer 7

A loan in which the monthly payment of principal and interest is level and constant.

Question 8

The amount of money borrowed.

Answer 8

Principal

Question 9

Charge made to borrow money.

Answer 9

Interest

Question 10

The interest on real estate loans is usually _____.

Answer 10

Simple Interest

Question 11

When one payment on a loan (usually at the end of the loan term) is larger than the regular monthly payment.

Answer 11

Balloon Payment

Question 12

A Budget Loan’s payments include:

Answer 12

PITI ( Principal, Interest, Taxes, and Insurance)

Question 13

In a budget loan, the taxes and insurance are held in an _______ account, aka a _____ account or ____ account.

Answer 13

escrow, reserve, impound account

Question 14

A loan in which payments are interest only is a ____ loan AKA a ______ loan.

Answer 14

Straight or Term loan

Question 15

A loan in which the payment does not even cover the interest due and which causes the principal balance to increase.

Answer 15

Negative Amortization Loan

Question 16

The pattern of payments (payment, interest rate, etc.) are found in the _____.

Answer 16

Promissory Note

Question 17

Payments on real estate loans are made in ____.

Answer 17

arrears

Question 18

An FHA Loan is insured by the _____.

Answer 18

Federal Housing Administration

Question 19

A VA Loan is guaranteed by ______.

Answer 19

The Department of Veteran Affairs

Question 20

Conventional Loan

Answer 20

A loan made with no government insurance or guarantee .

Question 21

Purchase Money Loan or Seller Carry Back

Answer 21

A loan in which the seller is the lender .

Question 22

A seller carryback loan in which a seller remains liable for an existing loan is a _____.

Answer 22

Wrap Around Loan

Question 23

A loan in which the interest rate may change.

Answer 23

Adjustable Rate or ARM Loan

Question 24

A loan in which the payments are lower in the early years and larger in later years.

Answer 24

Graduated Payment Loan

Question 25

A Blanket Loan is Secured by _______.

Answer 25

one or more properties

Question 26

A package Loan includes:

Answer 26

Personal Property

Question 27

A loan which allows a borrower to borrow more money within the same loan.

Answer 27

Open End Loan

Question 28

A loan in which funds are advanced as building progresses.

Answer 28

Construction or Interim Loan

Question 29

Take-Out -Loan

Answer 29

The normal, long term financing that pays off a construction

Question 30

A short term loan that fills the gap between the time a construction loan expires and a take-out loan is placed or enable a buyer of a home to borrow money on a home the buyer is trying to sell.

Answer 30

GAP, Swing, or Bridge Loan

Question 31

Loan where lender makes payments to the borrower.

Answer 31

Reverse Annuity Loan

Question 32

A loan with higher priority than another loan.

Answer 32

Superior Loan

Question 33

Junior Loan

Answer 33

A loan with lower priority than the other loan.

Question 34

Non-recourse Loan

Answer 34

borrower has no personal liability for the debt.

Question 35

Acceleration Clause

Answer 35

A loan clause that allows the lender to declare the debt all due and payable.

Question 36

A clause that allows the lender to declare the loan all due and payable if the property is sold.

Answer 36

Alienation Clause or Due on Sale Clause

Question 37

A clause that allows a lender to make an extra charge if the loan is paid off early is a ______.

Answer 37

Pre-Payment Penalty Clause

Question 38

Defeasance Clause

Answer 38

A clause in a mortgage that states the mortgage is null and void when the note is paid off.

Question 39

A clause calling for individual parcels to be released from a blanket loan.

Answer 39

Release Clause

Question 40

A clause which calls for a higher priority loan to be placed in a lower priority position to another loan.

Answer 40

Subordination Clause

Question 41

Usury

Answer 41

Charging more than the lawful rate.

Question 42

The Interest Rate Specified in the Note.

Answer 42

contract rate, aka the nominal rate

Question 43

The rate that would apply when no specific rate is stated in the note.

Answer 43

The Legal Rate