Vocab 9 - 20 words

Question 1

Straight Note

Answer 1

Loan in which there are no principal payments made. The entire principal amount of the loan is paid off at maturity or the end. The interest is paid off either at the end or during note’s term.

Question 2

Holder in Due Course (HDC)

Answer 2

An innocent purchaser of a note who didn’t realize there were any defects.

Question 3

Simple Interest

Answer 3

The cost of using or borrowing money based on the principle borrowed and time period of a loan. Type of interest paid on most home loans.

Question 4

Loan to value ratio (LTV)

Answer 4

The percent of a property’s value which is loaned (borrowed).

Question 5

Leverage

Answer 5

To enhance personal funds with borrowed money.

Question 6

Loan Commitment

Answer 6

Also known as a Mortgage Commitment, a lender’s promise that loan funds will be available.

Question 7

PITI

Answer 7

“PITI” stands for principal, interest, taxes, and insurance. It represents the four key components of a monthly mortgage payment

Question 8

Life Estate Pur Autre Vie

Answer 8

Life estate measured by the life of another.

Question 9

Reverse mortgage loan

Answer 9

Mortgage that pays a fixed annuity from the equity of an owner’s existing home.

Question 10

Construction Loans

Answer 10

Mortgage loan used to finance new construction

Question 11

Bridge Loan

Answer 11

Any loan distributed for a short duration.