Vocabulary Flashcards
(129 cards)
1
Q
An increase in the value of a property.
A
Appreciation
2
Q
When ownership of a mortgage is transferred from one company or individual to another.
A
Assignment
3
Q
A mortgage loan which requires the remaining balance be paid at a specific point in time.
A
Balloon Mortgage
4
Q
Description of a title which is free of liens or legal questions as to ownership of the property.
A
“Clear”
5
Q
The collateral in a home loan
A
The property itself
6
Q
The adjustment date on an adjustable-rate mortgage.
A
The date the interest rate changes.
7
Q
Deposit made by a potential buyer to show he/she is serious about buying a property.
A
Earnest Money Deposit (EMD)
8
Q
A right-of-way which gives persons other than the owner access to or over a property.
A
Easement
9
Q
A housing development created by dividing a tract of land into individual lots.
A
Subdivision
10
Q
Contributions made to the construction or rehabilitation of a property with labor or services rather than cash.
A
Sweat equity
11
Q
An adjustable rate mortgage with one interest rate for the first five or seven years and a different rate for the remainder of the term.
A
Two-step mortgage
12
Q
Legal document evidencing a person’s right to or ownership of a property.
A
Title
13
Q
Written document that transfers personal property from one owner to another.
A
Bill of sale
14
Q
An oral or written agreement that is binding is a court of law.
A
Contract
15
Q
Part of the purchase price of a property that the buyer pays in cash and does not finance with the mortgage
A
Down payment
16
Q
Named in a will to administer an estate.
A
Executor/executrix
17
Q
The greatest possible interest a person can have in real estate.
A
Fee Simple
18
Q
Required for properties located in federally designated flood areas; type of insurance that compensates for physical property damage resulting from flooding.
A
Flood insurance
19
Q
Individual conveying an interest in real property.
A
Grantor
20
Q
Insurance that covers in the event of physical damage to a property from fire, wind, vandalism, or other hazards.
A
Hazard Insurance
21
Q
A cash asset or asset easily turned into cash.
A
Liquid asset
22
Q
Another term for the lender in a mortgage agreement.
A
Mortgagee
23
Q
1% of the amount of the of the mortgage.
A
A point
24
Q
Derived power from a legal document and grants someone complete or limited authority on behalf of another.
A
Power of Attorney
25
The amount borrowed or remaining unpaid, as well as the part of the monthly payment that reduces the remaining balance of a mortgage.
Principal
26
A written promise to repay a specific amount over a specified period of time.
Promissory note
27
Allows lender to demand payment, most commonly if the borrow defaults on the loan or transfers title to someone without informing the lender.
Acceleration Clause
28
Anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee.
Broker
29
Term used by appraisers to estimate the physical condition of the building; may be different from the building’s actual age.
Effective age
30
The difference between the fair market value of a property and the amount still owed on the mortgage and other liens.
Equity
31
An improvement that intrudes illegals on another’s property.
Encroachment
32
The person to whom an interest in real property is conveyed.
Grantee
33
A mortgage loan, usually in second position, which allows the borrower to obtain cash drawn against the equity in the property, up to a predetermined amount.
Home equity line of credit (HELOC)
34
A legal claim against a property that must be paid off when it is sold.
A lien
35
An agreement from a lender guaranteeing a specific interest rate for a specific time at a certain cost.
Rate lock-in
36
The right of the government to take private property for public use upon payment of its fair market value
Eminent Domain
37
A mortgage with a lien position subordinate to the first mortgage on a piece of property.
Second mortgage (junior lien)
38
A mortgage in which the interest rate adjusts periodically, according to corresponding fluctuations in an index.
Adjustable-rate mortgage (ARM)
39
A table showing how much of each mortgage payment is applied to interest and how much to principal. It also shows the gradual decrease of the loan balance to zero.
Amortization schedule
40
A mortgage in which you make payments every two weeks instead of once a month
Bi-weekly mortgage
41
The limitation of how much an adjustable rate mortgage may adjust over a six-month period, annual period, and over the life of a loan.
Cap
42
A provision in a mortgage which allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.
Due-on-Sale clause/provision
43
The sum total of all the real and personal property owned by an individual at time of death.
Estate
44
A written contract giving a licensed real estate agent the exclusive right to sell a property for a specified time.
Exclusive listing
45
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Fair market value
46
A lender’s agreement to make a loan to a specific borrow on a specific property.
Firm commitment
47
A thorough inspection accomplished by a professional that evaluates the structural and mechanical condition of the property.
Home Inspection
48
Combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.
Homeowner’s Insurance
49
A property description which is recognized by law and is sufficient to locate and identify the property without oral testimony.
Legal description
50
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
Maturity
51
The individual borrowing money in a mortgage agreement
Mortgagor
52
A fee that may be charged to a borrower who pays off a loan before it is due.
Prepayment penalty
53
Any real estate agent who is a member of a local real estate board affiliated with the National Association of Realtors
Realtor
54
The original amortization term minus the number of payments that have been applied.
Remaining term
55
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
A survey
56
Specializes in examining and insuring titles to real estate.
Title company
57
State or local tax payable when title passes from owner to another.
Transfer tax
58
Federal law requiring lenders to fully disclose in writing all terms and conditions of a mortgage.
Truth-in-Lending
59
The valuation placed on a property by a public tax assessor for purposes of taxation.
Assessed value
60
Document issued by the Veteran’s Administration that certifies a veteran’s eligibility for a VA loan.
Certificate of eligibility
61
An unwritten body of law based on general custom in England and used to an extent in some states.
Common law
62
A person to whom money is owed.
Creditor
63
Federal law requiring lenders as other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Equal Credit Opportunity Act (ECOA)
64
An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low or moderate income family’s buying power and to decrease the total amount of cash needed to purchase a home. Participating borrowers are required to attend pre-purchase home-buyer education sessions.
Fannie Mae’s Community Home Buyer’s Program
65
Legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property.
Foreclosure
66
An individual’s financial obligations, to include long-term and short-term debt and any other amounts owed to others.
Liabilities
67
A value created according to a government formula intended to reflect the annual cost of borrowing, expressed as a percentage. It is always higher than the actual note rate on a loan.
Annual Percentage Rate (APR)
68
An individual qualified by education, training, and experience to estimate the value of real and personal property.
Appraiser
69
Final lump sum payment due at termination of a balloon mortgage.
Balloon payment
70
When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use.
Cash-out refinance
71
Time deposit held in a bank which pays a certain amount of interest to the depositor.
Certificate of deposit (CD)
72
Sometimes referred to as Homeowners Association Fees and are paid by the individual owners of condos or planned unit developments and are used to maintain the property and common areas.
Common area assessments
73
An amount owed to another
Debt
74
The decline in the value of property and an accounting term showing the declining monetary value of an asset.
Depreciation
75
The lawful expulsion of an occupant from real property.
Eviction
76
A loan in which the interest rate does not change during the loan term.
Fixed-rate
77
Typically referred to as a reverse annuity mortgage; this mortgage is unique in that instead of making payments to the lender, the lender makes payments to the mortgagor, allowing for the conversion of equity to cash. The loan does not have to be repaid until the borrower no longer occupies the property.
Home Equity Conversion Mortgage (HECM)
78
A written agreement between property owner and tenant laying out the terms of the agreement including payment and period of time.
Lease
79
The difference between the interest rate and the index on an adjustable rate mortgage.
A margin
80
Mortgage company which originates loans, then places them with a variety of other lending institutions with whom they usually have pre-established relationships.
Mortgage broker
81
The interest rate stated on a mortgage note
Note rate
82
PITI
Principal, interest, taxes, insurance
83
Reduces the principal on a loan before the due date and can result from a sales the owner’s decision to pay off the loan early, or foreclosure.
Prepayment
84
A written contract signed by a buyer and seller stating the terms and conditions under which a property will be sold.
Purchase agreement
85
A public official who keeps records of real property transactions in their area.
Recorder (a.k.a. “County clerk” and “registrar of deeds”)
86
Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
Real property
87
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
Right of survivorship
88
A loan backed by a security (collateral)
Secured loan
89
A mortgage or other type of lien that has a priority lower than that of a first mortgage.
Subordinate lien
90
Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.
Title insurance
91
An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. This guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.
Veteran’s Administration (VA)
92
A fixed-rate mortgage where the interest rate is reduced for a temporary period. The funds for this reduction can come from the seller, the lender, or another source. A lump sum is paid and held in an account used to supplement the borrower’s monthly payment.
“Buydown”
93
An additional individual who is both obligated on the loan and is on the title to the property.
Co-borrower
94
Real property where all the owners own the property, common areas and building together, with the exception of the interior of the unit to which they have title.
Condominium
95
An organization which gathers, records, updates, and stores financial and public records information about the payment records of individuals being considered for credit.
Credit repository
96
Failure to make mortgage payments when they are due.
Delinquency
97
Category of interest on real property which includes mortgages, easements, leases, or restrictions.
Encumbrance
98
A congressionally chartered, shareholder-owned company and the nation’s largest supplier of home mortgage funds
Federal National Mortgage Association (FNMA, or “Fannie Mae”)
99
Employer-sponsored investment plans allowing individuals to set aside tax-deferred-income for retirement or emergency purposes.
401(k) - private corporations
| 403B - non-profit organizations
100
Government owned organization created by congress on Sept. 1st, 1968; provides funds to lenders, specifically for VA/FHA loans.
Government National Mortgage Association (GNMA, or “Ginnie Mae”)
101
Jumbo loan limit (non-confirming loan threshold)
$417,000.00
102
Protects against claims against a property owner for negligence or bodily injury or property damage to another party.
Liability insurance
103
The percentage relationship between the amount of the loan and the appraised value of sales price (whichever is lower).
Loan to value (LTV)
104
Reports the raw data pulled from two or more of the major credit repositories.
Merged credit report
105
The total amount of principal owed on a mortgage before any payments are made.
Original principal balance
106
Limits the amount the interest rate can increase or decrease over the life of the mortgage.
Life cap
107
Given by a commercial bank or other financial institution for a certain time and certain amount.
Line of credit
108
A change in your mortgage without having to refinance.
Modification
109
The interest rate banks charge to their preferred customers. Changes are widely publicized in the new media and the same factors that influence this rate also affect interest rates of mortgage loans.
Prime rate
110
Legal document requiring a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
A note
111
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage or graduated-payment mortgage.
Payment change date
112
Transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.
Quitclaim deed
113
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Refinance
114
Amount of principal that has not yet been repaid.
Remaining balance
115
An arrangement to repay delinquent installments or advancements
Repayment Plan
116
[when given the] First opportunity to purchase a piece of property
Right of First Refusal
117
When a seller chooses to remain in the property after closing, typically giving the buyer compensation for the duration of the stay.
Sale-leaseback
118
Form of title where ownership does not pass to the survivors in the event of death
Tenancy in Common (remaining assets would be split between existing tenants)
119
Duties include: collecting principal/interest payments from borrowers, managing escrow accounts; these duties are usually acquired through purchase on the secondary market.
Loan Servicer
120
When a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.
Third-party origination
121
Fiduciary who holds or controls property property for the benefit of another
Trustee
122
Type of mortgage where buyer qualifies and is able to take over the seller’s mortgage.
Assurance mortgage
123
The transfers of title to a piece of property over the years
Chain of title
124
Property acquired by a married couple during the marriage and considered to be jointly owned.
Community property
125
Adjustable rate mortgage that allows the borrower to change the ARM to a fixed rate mortgage within a specified time.
Convertible ARM
126
In an effort to avoid foreclosure, an owner may provide the lender a:
Deed in lieu of foreclosure
127
Lender performs a calculation annually to make sure the correct amount of money for anticipated expenditures is being collected.
Escrow analysis
128
Report on the title of a property from the public records or an abstract of the title.
Examination of title
129
Consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.
Fair Credit Reporting Act
