Chapter 9 Flashcards
Adverse Action Notice
Notice to a borrower from a lender if the lender deny credit or make unfavorable changes. Notice should show Credit score & related information
Break Dawn Method
Depreciation subject / 3 classes curable or incurable
break even points
gross income= fixed costs and other related costs to run the business
Cap rate
Income divided by the value of the property
CREDIT losses
the amount of income loss because the tenant not paying the rent
Debt Ratio
Monthly Borrower’s obligations , then compare to borrower’s monthly gross income.
Economic age live model
Straight line method/ depreciation occurs at the steady rate over the economic life of the property.
Exchange Value
comparing the property to other similar properties on the open market.
GIM
gross income multiplier/ income of commercial properties/ sales price divided by gross annual income
Income ratio
Borrowers capacity to pay the loan by limiting the the percentage of gross income they spend on housing costs .
Lien
Title search debt secured by the property
loan commitment
legal binding document/ when underwriting is complete and loan is approved
preliminary title report
show the condition of the title before sales transaction or before the loan
RBP notice / Risk based pricing
Notice to borrower / credit terms less favorable than terms offered to other consumers based on Borrower credit score
ROI
Return on investment / RATIO of pre-tax net income to money invested
