Chapter 14 Review: Types of Mortgages Flashcards
Real property is pledged to the lender as collateral for the payment of debt in a process called _________. The borrower retains ___________ and enjoyment of the property
hypothecation
possession
In a fully amortized loan, each payment is made up of both _______________; the payments at the beginning of the term are mostly __________.
principal and interest
interest
The lender accepts the creditworthiness of the borrower and the property with a _________ loan; the loan is neither backed nor secured by the government
conventional
If a borrower has less than a 20% down payment, the lender will require the borrower to purchase ______________________ to reduce the lender’s risk
private mortgage insurance (PMI)
The interest rate on an ARM is tied to an _____; the margin remains the _____ over the life of the loan, and the interest rate is ________
index
same
capped
A _______ mortgage covers more than one parcel of real estate
blanket
A mortgage with one large payment at the end is an example of a _______ mortgage
balloon
A HELOC allows the owner to borrow against the _____________ and then repay the loan as he is able
equity in his property
The first mortgage on the property is said to be senior; later recorded mortgage are called
junior
A package mortgage includes both
real and personal property
A reverse mortgage becomes payable when the
owner dies or the property is sold
When a buyer and seller negotiate a land contract, the _______ agrees to finance the property. The buyer records a _____________ at the registry of deeds
seller
vendee’s lien
_____________ loans are mortgages backed by the government
Unconventional
MIP is a one-time upfront insurance premium and a monthly insurance premium associated with an ____ loan
FHA
The government insures FHA loans; the government ______________ VA loans
guarantees
