15 Flashcards
Which repayment plan is a partially amortized loan?
Balloon
Which of the following is not true about reverse annuity mortgages?
The loan must be repaid before the borrower’s death.
How does a borrower use private mortgage insurance?
A borrower can get a conventional loan with a lower down payment by insuring the loan through private mortgage insurance.
Seller James has taken back $20,000 as a second mortgage so Buyer Karl can qualify to buy the property. The $20,000 is what type of mortgage?
Purchase Money Mortgage
What type of document does a homeowner sign when agreeing to a mortgage?
Promissory Note
Which repayment plan is usually fixed-interest, long-term loans?
Amortized
Typically, the interest rate on an ARM is based in part on
an index.
What percent equity of the purchase price allows a borrower to request cancellation of PMI?
20%
What is the lender’s right of assignment?
The lender may sell the mortgage.
What type of loan is often used when a seller will not accept a property sale contingency?
Bridge Loan
Which of the following is not a way in which a property with an existing mortgage can be sold?
Foreclosure
Fred has an existing property mortgage, but seeks a second loan. What type of loan might help Fred?
Wraparound Loan
What is the process whereby the property’s legal title is transferred to the lender?
Deed in lieu of foreclosure
A blanket mortgage
covers more than one piece of property.
Steve has an existing loan with Sunray Bank and has applied for a second loan. He does not have to pay off his existing mortgage in order to qualify. What type of loan is Steve getting?
Wraparound Loan
The index plus the margin establishes the
Calculated rate.
Which repayment plan is known as an interest-only loan?
Straight
What is added to the current index to set the interest rate?
Margin
In which type of loan is the payment allocated only to interest?
Term mortgage
A subdivision developer most likely would apply for what type of loan?
Blanket Loan
Most conventional loans follow the underwriting standards outlined by
Freddie Mac and Fannie Mae.
Mark gets a home loan and the lender will charge him 3 points at closing. If the loan is for $68,000, what will Mark be assessed in points?
$2,040
What do we call the right to reclaim a property that has been foreclosed by paying off amounts owed to creditors, including interest and costs?
Right of Redemption
