Chp. 15 Quiz - Real Estate Finance Flashcards
In the event of default by the purchaser, the lender has the right to bring legal action through the courts to satisfy the debt. This is called by what name?
Judicial Foreclosure
Which loan covers the period of time between the end of one mortgage and the beginning of another?
Bridge
Paul’s loan payment is the same amount each month. Paul is most likely holding what kind of loan?
Fully Amortized
Which of the following does not meet the criteria for a VA loan?
To make a down payment on a motor home
Ruth must deposit $1,113.45 into a FHA-backed escrow account. This is known as what type of account?
Impound Account
What is the interest rate on an ARM tied to?
Index
Typically, conventional loans
carry prepayment penalties, while government-backed loans do not.
The loan origination fee on a VA loan cannot exceed
1 percent of the loan amount.
Typically, conventional loans
require higher down payments than government-backed loans require.
Which organization insures loans made by approved lending institutions?
FHA
A loan that covers the period between the end of one loan and the beginning of another loan is called a(n)
Bridge loan.
What type of loan is often used when a seller will not accept a property sale contingency?
Bridge Loan
What type of account holds property insurance, taxes, and Mutual Mortgage Insurance in escrow?
Impound Account
In which of the following types of loans is the payment allocated only to interest?
Interest Only
A negative amortization cap usually limits the amount the borrower can owe to _____ of the original loan amount?
125%
The loan-to-value limit set for conventional loans on single-family residences is
85%
Which repayment plan is known as an interest-only loan?
Straight
Buyer Rich has asked Seller Sally to hold $15,000 as a second mortgage. What type of mortgage is Rich requesting?
Purchase Money Mortgage
Fixed-rate fully-amortized loans
provide a fixed interest rate for the life of the loan.
Which of the following is not a way in which a property with an existing mortgage can be sold?
Foreclosure
A subdivision developer most likely would apply for what type of loan?
Blanket Loan
Which of the following does NOT happen as part of a foreclosure by action in equity and sale?
The mortgagor sues the lender.
Points are equal to _______ of the loan amount?
1%
Jim has a loan where the entire payment amount goes to the interest owed? What type of loan does Jim hold?
Straight
