Chapter 13 Flashcards
What does amortize mean?
To put to death
What is a balloon payment loan?
is a final payment for a partially amortized mortgage loan
What is an adjustable mortgage rate loan?
It means the interest rate can fluctuate up or down. It is always tied to some type of financial index; increases are capped for each period and for the term of the loan.
What is a package loan?
These loans are used primarily in business opportunities wherein a commercial store or restaurant has personal property that are a part of that business
What is a Land Contract?
A type of mortgage
What is a Purchase Money Mortgage?
A type of mortgage
What is a Blanket Mortgage?
A type of mortgage used for several pieces of property
What is a Reversed Annuity Mortgage?
A type of mortgage that benefits senior citizens where the lender makes payments to the homeowner each month based upon the accumulated equity rather than giving the money as a lump sum.
What is FHA or Federal Housing Administration?
insures loans for lenders of real property made by qualified or approved lending institutions.
Who oversees the FHA?
The Department of Housing and Urban Development
For the VA to guarantee a loan:
- Veteran should serve for at least 181 days
- Veteran assumes liability for the loan. If the loan defaults, veteran forecloses property
- Property must be owner occupied for at least a year
- A qualified veteran can borrow up to 100% of the loan without down payment
- Veteran must apply for certificate of eligibility before applying for a VA loan
- The house must qualify with an appraisal and is issued a certificate of reasonable value
- Loans may be assumed by non-veterans
- VA does not allow prepayment penalty
What is a Conventional Loan?
- are neither guaranteed nor insured by the federal government.
- Loans are made by local lenders through savings and loans, mortgage brokers, mortgage bankers, banks and credit unions.
- A minimum down payment of 20% must be made
What is PMI?
Private Mortgage Insurance is charged at the beginning of the loan and may also be part of the monthly payment so the payment becomes PITI, Principle, Interest, Taxes, Insurance and PMI Insurance
What is HUD’s mission?
- Human and Urban Development oversees the FHA.
- Creates strong, sustainable, communities and quality affordable homes for all.
- Strengthens the housing market to boost homeownership
What is ECOA?
Equal Credit Opportunity Act prohibits discrimination in:
- Loan underwriting
- Treatment from income from alimony
- Prohibits inquiry about child bearing plans
