Ch 11 - Loan Classifications Flashcards
What a grantee agrees to pay a debt,
_______
A loan is being assumed
Any loan not government guaranteed or government insured
Conventional loan
A provision that states the borrower may obtain the release of anyone lot or parcel from the lead by repairing a definite about of the loan
Partial release clause
Enables a borrower who is paying off an existing mortgage to obtain additional financing from the second lender
All-inclusive mortgage, also called a wrap-around mortgage
A type of mortgage where the interest rate and maturity are fixed but the monthly payment gradually rises
Graduated payment mortgage (GPM)
A mortgage generally originated at one rate of interest, with the rate fluctuating up or down during the loan term based on a certain economic indicator
Adjustable rate mortgage (ARM)
Limits on interest rate adjustments to the amount of increase in any one year and over the life of the loan
CAP
A premium added it to the index that determines the interest rate
Margin
The shared-appreciation mortgage could also be called a…
Participation loan
True or false:
The funding fee is waived for DISABLED veterans
True
True or false:
Under an open-end mortgage, the lender is obligated to advance any additional funds
False
True or false:
A reverse loan allows senior citizens to realize the equity build up in their homes without having to sell
True
True or false:
There is no VA limit on the amount of the loan a veteran can obtain
True
True or false:
Residential property purchased with a VA loan must be owner-occupied
True
True or false:
For loans originated since December 15, 1989, there are no assumptions without complete buyer qualification and there are no longer any investor loans
True, but this specifically applies to FHA loans
Under a budget mortgage loan, at the time the loan is made, the borrower is required to establish a reserve fund for the payment of these items
pro rata share of real estate taxes, insurance
Who was the first private insurance company to insure conventional loans?
Mortgage guaranty insurance corporation (MGIC)
What kind of mortgage secures a note executed by the borrower to the lender, as well as any future advances of funds made by the lender to the borrower or his or her successors in title?
An open-end mortgage
What was created in 1934 to encourage improvement in housing standards and conditions, provide an adequate home-financing system through insurance of housing credit, and exert a stabilizing influence on the mortgage market?
Federal Housing Administration (FHA)
For which kind of loan will the lender disburse the loan proceeds in installments?
A construction loan
What is the most popular FHA program, which applies to loans on one-to-four family residences?
Title II, Section 203(b)
What is the federal agency under the US Department of agriculture, originally designed to handle emergency farming financing, that channels credit to farmers in rural residents and communities?
Rural economic and community development administration (RECD)
What is the objective of a graduated payment mortgage (GPM)?
To help borrowers qualify for loans by basing repayment schedules on salary expectations
