Chapter 11 - Mortgage Analysis in Real Estate

Question 1

bonus

Answer 1

portion of the face value of a mortgage loan that exceeds the funds actually received by the borrower and is intended as additional compensation for the lender

Question 2

discount

Answer 2

offer to purchase is sold for less than face value of loan

Question 3

market value (of an offer)

Answer 3

cash down payment plus present value of mortgage loan discounted at the market rate (ie. market value of the mortgage)

Question 4

market value (of a mortgage)

Answer 4

present value of future mortgage payments (and outstanding balance) calculated at the market rate of interest

Question 5

discounting

Answer 5

process of expressing expected future income in terms of a present value

Question 6

lender bonus

Answer 6

fee charged by lenders as a means of increasing their yield on a loan

Question 7

brokerage fee

Answer 7

fee charged by mortgage brokers for arranging a mortgage loan