Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate > unit 12 > Flashcards

unit 12 Flashcards

1
Q

Loan Factors cahrt

A

simple charts are available to determine monthly payments for a fully amortized loan over varius terms and interest rates. The number shown is the montly paymernt per $1000 of debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

calculate loan factors:

A

loan amount divide by $1000 = (x)

x times the payment factor for the loan interest rate and terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

circle formula for interest

A

IRP

 I R.     P

Interest
rate
purchase price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is a title theory?

A

the borrower grants leagal title to a trustee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

in a lien theory

A

the borrower holds both legal and equitable title

the lender has a specific lien on the property as security for the mortgage debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a promissory note?

A

it is a legal instrument that provides evidence of the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is an acceleration clause?

A

if the borrower defaults, lender can demand immediate payment of entire balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is the mortgage or deed of trust (security instrument)?

A

instruments that pledge property as security for a debt

mortgage or deed of trust creates a lien when recorded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Acceleration clause

A

lender may demand full payment in case of defaults

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

defeasance caluse

A

when debt is paid lien must be removed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Satisfaction or reconveyance deed

A

proves payments are in full and are recorded by borrower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Due on sale caluse

A

also called alienation clause

provides that when the property is sold the lender may demand immediate payment of the outstanding debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

prepayment calsue

A

establishes terms and conditions for early loan payoff

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

power of sale clause

A

optional provision in mortgage if allowed by state law: standard in deeds of trust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the Loan to Value ratio?

A

LTV determines the amount that can be borrowed and if private mortgage insurance will be needed
max percentage of value the lender will loan to the borrower
determined by the sale price or appraised value whichever is lower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is Leverage?

A

use of borrowed money to finance a purchase

the higher the LTV the higher the leverage

17
Q

what are discount points?

A

one point= 1% of the loan ammount

lender charges points to increase yield on a loan

18
Q

What is the Loan origination fee?

A

a cahrge by the lender to process and issue a loan

19
Q

Foreclosure

A

is a procedure wherby property used as security for a debt is taken by a creditor/lendor and sold to satisfy the debt
this removes all leins from the property

20
Q

What is judicial forclosure

A

lawsuit to obtain the power to foreclose from a court

21
Q

what is nonjudicial foreclosure?

A

trustees and mortgagees have the right to foreclose without going to court

22
Q

deed in lieu of foreclosure

A

the borrower deeds the property to the lender to avoid foreclosure
this does not remove secondary leins
the lender may not be willing to accept an encumnered title

23
Q

What is a term straight loan?

A

interest-only payments until maturity or at end of term

entire principal paid back ina. lump sum balloon payment

24
Q

partially amortized balloon loan

A

equal paments of principal and interest

with lump some payment at the end

25
Q

Fully amortized loan (fixed rate)

A

equal consecutive installments of principal and interest

balance becomes zero

26
Q

What is the adjustable rate morgage (ARM)>

A

interest rate subject to change based on an economic index or indicator
not recommended for borrowers on a fixed income such as a retiree

27
Q

What does PITI stand for>

A

Principal interest, taxes and insurance

28
Q

What is a budget mortgage?

A

includes debt service plus tax and insurance escrow

29
Q

What is a package mortgage?

A

real property plus personal property

30
Q

what is a blanke mortgage?

A

a single loan with more than one parcel used as security

31
Q

what is a construction morgage?

A

interim financing made available in installments as improvements are completed

32
Q

what is a reverse mortgage?

A

morgagee pays the morgagor

the borrower receives monthly advances from the lender

33
Q

what is a Home equity loan?

A

owner borrows against equity in home

34
Q

what is a subprime loan?

A

a higher interest rate is charged because the borrower and or property used as security is higher riske

35
Q

what is a predatory lending?

A

an umbrella term for unfair or illegal lending practices

36
Q

what is a purchase money mortgage?

A

uses a promissory note and deed of trust or morgage

37
Q

what is a contract for deed?

A

a contract for deed is also known as a land contract or an installment contract

the purchase price is paid in installments to the seller

Real Estate (22 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions