1013 Finance: Chapter 7

Money received or earned from a loan investment interest
_______ _____ is rent that is paid only for the amount of principal still owed simple interest
The formula for computing simple interest is I = _ _ _ PRT
The dollars required to pay off $1,000 of a loan for a set number of years on a fully amortized loan that will be paid off at the end of the loan payment is represented by the ___ __ ____ interest rate factor
A loan requiring someone to only pay interest until a stop date at which the entire principal is due is called a _____ (straight, bullet) term loan
__ ___ ____ are used to reduce monthly payments, and only require payments on interest interest-only loans
If a borrower was making payments on his loans that were not enough to cover the interest, the loan would be ____ _____ and adding the unpaid interest onto the principal negatively amortized
A point is ___ % of the _____ loan amount 1, total
Up-front interest paid to lower the interest rate for borrowers is called a ____ ____ discount point
money paid to lenders for a lower interest rate and monthly payment buydown
Interest paid in advance that permanently lowers a borrower’s payment is a ___ ____, if it is for a lesser period of time it is a ___ ___ permanent buyout, temporary buyout
_____ provides for payments on both principal and interest amortization
Payments that are paid on the 1st of a month and cover the principal due on that day, and the interest charged from the previous month, are paid in _____ arrears
What are the two general forms of real estate loans? conventional, governmental
Conventional loans can be _____ or _____ based on if they meet fannie/freddie guidelines conforming, non-conforming
Loans insured by FHA, VA, and the USDA will be ___ ____ governmental loans
A ____ ___ loan has a constant interest rate over the term of a loan. Buyer is usually allowed to pay off loan early fixed rate
____ ____ are part of a monthly payment on the loan, and are set aside to pay annual taxes and insurance escrow funds
taxing according to value ad valorem
The tax rate is expressed in terms of ____, which are ____ per thousand dollars of assessed value mills, thousandths
_____ insurance includes both hazard and liability insurance homeowners
An ___ ___ ____ has payments adjusted to a prearranged index, usually including an overall interest rate cap over the entire term of the loan adjustable rate mortgage
_____ ____ indicate the frequency interest rate adjustments in an ARM adjustment periods
For an ARM initial rates, or ____ rates are interest rates usually under market value to attract borrowers teaser
ARM: The calculated rate or ___ rate, ____ ___ ____, is imposed from time to time at the adjustment period note, index plus margin
The starting point to adjust a borrowers interest rate in an ARM index
ARM: profit a lender wants to make, that is a percentage rate added to the _____ to derive the new note rate is called the ____ index, margin
___ ___ ___ has loan payments that are lower at the beginning of the loan, and increase over time to fully amortize the loan. results in negative amortization during the beginning of the loan graduated payment mortgage
Type of loan with tax deductible interest home equity
Type of loan that allows borrower to write a check for an amount up to a limit based on the equity of the property home equity line of credit
Loan that pays buyers for the equity in homes, with title transferring to lender reverse annuity mortgage
Targeting individuals in disadvantaged communities for credit on unfair terms reverse redlining
The ____ _ ___ ___ ___ of 1994 protected homeowners from lenders performing reverse redlining homeownership and equity protection act
Loan limits are set by the ___ ___ ___ ____ and is currently _______ federal housing finance agency, $417,000
Loans exceeding the current fannie/freddie loan limit is considered a ___ ___ jumbo loan
PMI is required on ____ loans when the loan to value ratio is in excess of ____% as stated in fannie/freddie guidelines conventional, 80
Refinancing costs should generall be recovered over a __-__ yr period 2,3
The ___ ___ ____ allows lenders to modify an existing loan to provide borrowers with more affordable monthly payments at no more than 38% of gross monthly income. LTV must be at least 90% streamlined modification program
The ___ ___ ___ ___ (_ _ _ _) aimed to reduce homeowners monthly payments to a 31% front-end ratio Home affordable modification program (HAMP)
____ lenders provide or specialize in B,C, or D paper mortgage loans subprime
the practice of charging interest rates/fees that are higher than justified based on risk based financing predatory lending
An ___ ___ ____ allows borrowers to secure additional funds from a vendor, based on the principal already paid by borrower, and repaid by extending the term of lender, or increasing monthly payments. (often used by farmers) open end mortgage
Loan used to finance the costs of labor and materials as they are used during the course of construction of a building. Called a ___ ___, and also known as an ___ ____ construction loan, interim financing agreement
Construction mortgages pay out in ____ or stages as construction progresses draws
Used to protect a lender in a construction mortgage, a ____ ____, names the lender as the primary beneficiary of the loan completion bond
___ ___ are used when a lender requires a borrower to pledge more than one parcel of property as collateral blanket mortgage
In a blanket mortgage, if properties are located in more than one county, the deed must be _____ in ____ counties properties are in recorded, all
A ___ ___ is used in a blanket mortgage to relinquishing individual properties pledged as collateral as payments are made release clause
The ____ clause specifies that in the event of a default and a foreclosure, financiers will recognize and protect the rights of each individual lot owers recognition
A ____ mortgage include real estate as well as personal property (fixtures). package
_____ oversees the federal manufactured housing program HUD
When a seller carries back a portion or all of the sales price as a loan to a buyer, the buyer may have a ____ ___ _____, which can either be a ___ or ___ lien on the property purchase money mortgage, senior, junior
A ____ loan is an equity loan designed to serve a purpose, usually short term, and usually are an interest only loan with a balloon payment bridge
Created as a junior financing tol that encompasses an existing debt wraparound loan
Gives the buyer the absolute right to buy as long as the payments are kept current option to buy
A ___ ___ ___ _ ___ allows the buyer to lease the property for a period of time, then buy it at a predetermined price lease with option to buy
A lessee has the ___ __ ____ _____ when they are offered the first chance to purchase the property to the public right of first refusal
A contract that says the buyer will lease for a specified period of time and will buy at the specified price lease purchase
Mortgage participation has three types, ____ among several mortgagees, the ____ of several mortgagors, and a _____ between mortgagee and mortgagor partnership, teaming, partnership
A ____ of ______ involves more than one mortgagee as the owner of the financing instrument of a real estate project partnership mortgagees,
When several mortgagors share responsibility for a single mortgage on a multifamily property, called a cooperative, they form a ____ of _____ partnership mortgagors
When a mortgage becomes a partner in ownership of a project on which a loan will be placed they would have a ____ of _____ and ____. Which tend to have lower interest rates and will allow a higher LTV ratio partnershio mortgagees mortgagors
In a ___ ____ ____ a lender acts as both owner and financier, and will reduce the initial interest rate in exchange for a share of the properties future increased value shared appreciation mortgage
In a ___ ___ the owner sells a property to an investors, and then leases that property from him to acquire funds for financing projects, has tax deductible lease payments sale leaseback

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