Chap 6 Real Estate Financing Flashcards
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:
Amortized loan
Which of the following would a borrower obtain a residential real estate mortgage loan:
Insurance company
Pension fund
Endowment fund
Commercial lender
Commercial lender
In Illinois, if a borrower defaults on their mortgage payments the owner has the right to redeem their property through which redemption right?
Equitable right of redemption
What is associated with a mortgage?
Acceleration
Defeasance
Assignment of rents
The truth-in-lending law, implemented by regulation Z, sets forth certain requirements regarding loans to individuals for which purposes
Household use improvements
Room additions
Swimming pools
A lender may protect its interests in a mortgage loan by obtaining additional security from:
A private mortgage insurance
The type of mortgage loan that uses both real and personal property as a security is a?
Package mortgage
An extension of credit from a seller to a buyer to allow the buyer to complete the transaction is called a
Purchase money mortgage
What are the ways lenders service loans?
Collecting payments
Paying real estate taxes from escrow accounts
Sending overdue notices
Discount points charged on a VA guaranteed mortgage loan can be paid by:
Buyer and seller
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:
Open end mortgage
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:
Pay into an impound account
The finance fee charged by the lender to make the loan is a?
Loan origination fee
For purposes of mortgage foreclosures, Illinois is classified as what type of state?
Judicial foreclosure
What type of loan allows for the release of a portion of the property as the loan is paid down?
Blanket loan
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?
Blanket mortgage
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?
Acceleration clause
Which of the following would be a legal way to advertise loan terms?
$499 per month
$1000 down
8% interest
Assumable mortgages
Assumable mortgages
In a sale-and-lease back arrangement the
Buyer becomes the lessor
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 reverse annuity mortgage
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?
Equitable title
When compared with a 30 year payment period, taking out a loan with a 20 year payment period would result In?
Faster amortization
Higher monthly payments
Quicker equity build up
Illinois is most accurately referred to as what type of mortgage theory state?
Intermediate
The purpose of a mortgage is to:
Provide security for the loan
A borrower has secured an FHA insured loan. This means the FHA will will insure who against a loss?
Lender
An FHA insured mortgage loan would most likely be obtained from which of the following
Any qualified lending institution
In absence of an agreement to the contrary, the mortgage having priority will be the one:
That was recorded first
The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the
Loan-to-value ratio
True or false?
A buyer does not have to be a veteran to assume a VA loan?
True
Under an installment contract, the title to the property is held by the?
Vendor
When s mortage loan has been paid in full,
A satisfaction of mortgage is recorded
In a graduated payment loan:
Mortgage payments increase
Under the lien theory, the equitable title to the property is held by the
Mortgagee (the lender)
A person who asssumes an existing mortgage loan is
Personally responsible for paying the principle balance
Illinois statutory usury ceiling for real estate financing is:
There is no ceiling
The interest in a property held by the owner in excess of any liens against it is called
Equity
If a buyer of an $185,000 home obtains a $150,000 mortgage with 4 points, how much will the lender charge at closing?
$6,000
The principle distinction between the primary mortgage market and the secondary mortgage market is?
Origination versus the purchase of mortgage loans
Fannie Mae, ginnie Mae, Freddie Mac, have in common the purpose of?
Purchasing existing mortgage loans
The purpose of real estate settlement procedures act (RESPA) is to?
See that the buyers and sellers know all of their settlement costs
The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a?
Due-on-sale clause
Which of the following pairs of terms is considered synonymous?
Interim financing and construction loan
Charging more interest than is legally allowed is known as
Usury
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?
Satisfaction of mortgage
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?
The mortgagor (the borrower)
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 deficiency judgement
A land contract provides for the:
Conveyance of legal title at a future date
A promissory note:
Is the primary evidence for a debt
Type of loan tat will most likely have the lowest loan-to-value ratio?
Conventional loan without PMI
The FHA
Insures loans
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 partially amortized loan
The pledging of property as a security for payment of a loan is:
Equity
What are the legitimate factors a lender will take into consideration when deciding whether to grant a borrower a mortgage loan?
Creditworthiness of borrower
Amount of borrowers income
Ability to borrow to make payment
An existing mortgage loan can have its lien priority lowered through the use of a?
Subordination agreement
Regulation Z applies to:
Real estate sales agreements
Which of the following normally purchase mortgages in the secondary mortgage market:
Mortgage bankers
Ginnie mae
Federal housing administration
Veterans administration
Ginnie Mae
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?
$1,875
