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DC REAL ESTATE > Chap 6 Real Estate Financing > Flashcards

Chap 6 Real Estate Financing Flashcards

1
Q

A real estate loan payable in periodic installments that are sufficient to pay the principle in full during the term of the loan is called:

A

Amortized loan

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2
Q

Which of the following would a borrower obtain a residential real estate mortgage loan:

Insurance company
Pension fund
Endowment fund
Commercial lender

A

Commercial lender

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3
Q

In Illinois, if a borrower defaults on their mortgage payments the owner has the right to redeem their property through which redemption right?

A

Equitable right of redemption

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4
Q

What is associated with a mortgage?

A

Acceleration
Defeasance
Assignment of rents

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5
Q

The truth-in-lending law, implemented by regulation Z, sets forth certain requirements regarding loans to individuals for which purposes

A

Household use improvements
Room additions
Swimming pools

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6
Q

A lender may protect its interests in a mortgage loan by obtaining additional security from:

A

A private mortgage insurance

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7
Q

The type of mortgage loan that uses both real and personal property as a security is a?

A

Package mortgage

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8
Q

An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a

A

Purchase money mortgage

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9
Q

What are the ways lenders service loans?

A

Collecting payments
Paying real estate taxes from escrow accounts
Sending overdue notices

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10
Q

Discount points charged on a VA guaranteed mortgage loan can be paid by:

A

Buyer and seller

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11
Q

The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the:

A

Open end mortgage

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12
Q

Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to:

A

Pay into an impound account

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13
Q

The finance fee charged by the lender to make the loan is a?

A

Loan origination fee

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14
Q

For purposes of mortgage foreclosures, Illinois is classified as what type of state?

A

Judicial foreclosure

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15
Q

What type of loan allows for the release of a portion of the property as the loan is paid down?

A

Blanket loan

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16
Q

A developer had a mortgage loan on his entire housing development. When he sold the lot to a buyer, he was able to deliver title to that lot free of the mortgage lien by obtaining a partial lease. What type of loan did the developer have?

A

Blanket mortgage

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17
Q

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid Balance immediately due and payable upon Default is what clause?

A

Acceleration clause

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18
Q

Which of the following would be a legal way to advertise loan terms?

$499 per month
$1000 down
8% interest
Assumable mortgages

A

Assumable mortgages

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19
Q

In a sale-and-lease back arrangement the

A

Buyer becomes the lessor

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20
Q

Dannie has owned her house for over 50 years. It has fallen into disrepair but, because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan would probably best suit her needs?

A

A reverse annuity mortgage

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21
Q

The seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and buyer enter into a contract for deed is?

A

Equitable title

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22
Q

When compared with a 30 year payment period, taking out a loan with a 20 year payment period would result In?

A

Faster amortization
Higher monthly payments
Quicker equity build up

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23
Q

Illinois is most accurately referred to as what type of mortgage theory state?

A

Intermediate

24
Q

The purpose of a mortgage is to:

A

Provide security for the loan

25
Q

A borrower has secured an FHA insured loan. This means the FHA will will insure who against a loss?

A

Lender

26
Q

An FHA insured mortgage loan would most likely be obtained from which of the following

A

Any qualified lending institution

27
Q

In absence of an agreement to the contrary, the mortgage having priority will be the one:

A

That was recorded first

28
Q

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the

A

Loan-to-value ratio

29
Q

True or false?

A buyer does not have to be a veteran to assume a VA loan?

A

True

30
Q

Under an installment contract, the title to the property is held by the?

A

Vendor

31
Q

When s mortage loan has been paid in full,

A

A satisfaction of mortgage is recorded

32
Q

In a graduated payment loan:

A

Mortgage payments increase

33
Q

Under the lien theory, the equitable title to the property is held by the

A

Mortgagee (the lender)

34
Q

A person who asssumes an existing mortgage loan is

A

Personally responsible for paying the principle balance

35
Q

Illinois statutory usury ceiling for real estate financing is:

A

There is no ceiling

36
Q

The interest in a property held by the owner in excess of any liens against it is called

A

Equity

37
Q

If a buyer of an $185,000 home obtains a $150,000 mortgage with 4 points, how much will the lender charge at closing?

A

$6,000

38
Q

The principle distinction between the primary mortgage market and the secondary mortgage market is?

A

Origination versus the purchase of mortgage loans

39
Q

Fannie Mae, ginnie Mae, Freddie Mac, have in common the purpose of?

A

Purchasing existing mortgage loans

40
Q

The purpose of real estate settlement procedures act (RESPA) is to?

A

See that the buyers and sellers know all of their settlement costs

41
Q

The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a?

A

Due-on-sale clause

42
Q

Which of the following pairs of terms is considered synonymous?

A

Interim financing and construction loan

43
Q

Charging more interest than is legally allowed is known as

A

Usury

44
Q

Laura has just made the final payment on her home mortgage to her lender. There will still be a lean on a property until the lender records a?

A

Satisfaction of mortgage

45
Q

If the amount realized at a Sheriff’s sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to?

A

The mortgagor (the borrower)

46
Q

If a property sold as a mortgage foreclose does not sell for an amount suffieciebt to satisfy the outstanding mortgage debt, the mortgagor may be responsible

A

A deficiency judgement

47
Q

A land contract provides for the:

A

Conveyance of legal title at a future date

48
Q

A promissory note:

A

Is the primary evidence for a debt

49
Q

Type of loan tat will most likely have the lowest loan-to-value ratio?

A

Conventional loan without PMI

50
Q

The FHA

A

Insures loans

51
Q

A borrower obtained a $7000 second mortgage loan for five years at 6 percent interest per annum. Monthly payments were $50. The final payment included the remaining outstanding principle balance. What type of loan is this?

A

A partially amortized loan

52
Q

The pledging of property as a security for payment of a loan is:

A

Equity

53
Q

What are the legitimate factors a lender will take into consideration when deciding whether to grant a borrower a mortgage loan?

A

Creditworthiness of borrower
Amount of borrowers income
Ability to borrow to make payment

54
Q

An existing mortgage loan can have its lien priority lowered through the use of a?

A

Subordination agreement

55
Q

Regulation Z applies to:

A

Real estate sales agreements

56
Q

Which of the following normally purchase mortgages in the secondary mortgage market:

Mortgage bankers
Ginnie mae
Federal housing administration
Veterans administration

A

Ginnie Mae

57
Q

A borrower and seller have agreeed to split the discount points. The sales price of the property was $125,000 and the borrower secured a 75% loan. The lender charged four points and a one percent origination fee, how much did the borrower and the seller each pay?

A

$1,875

DC REAL ESTATE (2 decks)

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