5.2 Flashcards
An FHA loan allows you to buy a house with as little as ______ % down.
3.5%
A mortgage loan is _____ by the Federal Housing Administration (FHA).
Insured
True or False:
The FHA makes home loans.
False (It insures them)
To get an FHA home loan, you’ll need to have a good credit history, and sufficient ______ to qualify for the loan.
Income
Because FHA is insuring the loan, ______ payments must be made by the borrower.
Mortgage insurance premium
The mortgage payment acronym “PITI” stands for Principal, Interest, Taxes, and _______.
Insurance
A mortgage loan is ______ by the Department of Veteran Affairs (DVA).
Guaranteed
A DVA loan requires a minimum of ______% down payment.
0%
True or False:
With a DVA loan, the veteran does not have to occupy the home.
False
______ is a type of mortgage where a mortgagee makes payments to a mortgagor.
Reverse annuity
DVA loans allow a loan-to-value ratio (LTV) of up to ______.
100%
True or False:
With a DVA loan, an escape clause must be part of the purchase agreement.
True
A mortgage loan that is not a DVA or FHA loan is a _______ loan.
Conventional
The ______ clause in the mortgage document allows a lender to accelerate the loan if the property is sold without informing them.
Alienation or Due-on-Sale
A _____ mortgage covers more than one parcel of land.
Blanket
A/an ______ is a conventional mortgage with less than 20% down payment.
Insured conventional
The fee FHA charges borrowers is the _______ (also known as the MIP).
Mortgage insurance premium
An insured conventional loan requires ______ (also known as PMI),
Private Mortgage Insurance
A/an ______ mortgage allows the borrower to obtain further money advances at a later date.
Open-end mortgage
A/an _____ is mortgage financing where the buyer borrows from the seller instead of a bank.
Purchase money mortgage
Homebuyers can apply for an insured conventional loan with as little as _____% down payment.
5%
A/an ______ is a mortgage that includes personal property.
Package Mortgage
Loans for new construction or remodeling projects involve ______ financing to pay contractors as the improvements are completed.
Interim
A/an ______ is junior financing (second mortgage) in which the buyer makes payments to another party - usually the seller - who, in turn, continues to make payments on the first loan.
Wraparound mortgage
A/an _______ (also known as ARM) is a loan in which the interest rate adjusts at pre-determined times, and the adjustment is based on an economic index.
Adjustable rate mortgage
A _____ occurs when a seller owes more money on the mortgage loan than the property is selling for, and the lender agrees to remove the mortgage lien on the property to allow the transfer of title.
Short-sale
A _______ amortization loan is when the payment is less than the interest owed each moth, and the balance increases.
Negative
