Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate Exam Prep > Finance and Valuation > Flashcards

Finance and Valuation Flashcards

1
Q

Acceleration clause

A

A mortgage clause stating that the entire balance of the debt becomes due and payable immediately upon default of any of the terms of the mortgage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Ad valorem tax

A

“According to the value” The principal usage is in Ad Valorem tax that are assessed in proportion to the property’s value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Adjustable rate mortgage

A

A mortgage loan on which the interest rate rises and falls with changes in prevailing rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Adjustable basis

A

Sales price of property less commissions, fix up fees, and closing costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Alienation

A

The transfer of rights from one person to another. Can be voluntary or involuntary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Appreciation

A

Increase in value of a property due to natural or economic factors. The opposite of depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Assessed value

A

The valuation placed upon property by a public tax assessor as the basis for taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Assumption of mortgage

A

When taking title to the property with an existing mortgage, assuming full personal liability for its repayment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Balloon mortgages

A

A mortgage that requires a limp sum payment (balloon payment) at the end

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Basis

A

The price paid for the property; used in calculating income taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Blanket mortgage

A

A mortgage covering more than one parcel of land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Buy-down

A

A cash payment to a lender so as to reduce the interest payment a borrower must pay

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Capitalization

A

A method of determining the present value of a future income stream

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Deed in lieu of Foreclosure

A

Voluntary act by a borrower and a lender. “Friendly foreclosure”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Deed of trust

A

Used instead of a mortgage in some states (Title theory)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Defeasance clause

A

A mortgage clause that stipulates the amount of indebtedness and terms of repayment, and states that the mortgage becomes void when the debt is paid off

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Deficiency judgement

A

A general lien on all property of a defaulting debtor, issued when the security for a debt is insufficient to satisfy the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Depreciation

A

Decrease in the value of the property due to natural economic factors The opposite of appreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Economic life

A

The time remaining during which a property can be profitably and feasibly used

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Equity

A

Market value of a property less the debt against it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Escalation clause

A

Clause in a lease providing for the adjustment of rent based on specified indexes or circumstances

22
Q

Escrow closing

A

Deposit of funds and/or documents with neutral third party along with instructions as to how to conduct the closing

23
Q

Functional obsolescence

A

A loss in property value brought about by defects in the design or structure of a building

24
Q

Graduated payment mortgage

A

A fixed interest rate loan wherein the monthly payment starts low and then increases

25
Q

Hypothecate

A

To use property as security for a debt without giving up possession of it

26
Q

Junior lien

A

A lien whose claim upon the asset is subordinate to another lien. The order of priority is usually established according to date of recordation

27
Q

Like-kind exchange

A

If two properties that are being held for investment or income purposes are exchanged by owners who each have fee simple title then the owners may defer capital gains tax

28
Q

Mill

A

One tenth of a cent, one-thousandth of a dollar

29
Q

Millage rate

A

Rate per dollar of assessed valuation. The rate of real property taxes is often expressed as a millage rate

30
Q

Negatively amortized mortgages

A

A situation wherein a loan payment is insufficient to pay the interest due and the excess is added to the balance owed

31
Q

Net income

A

The amount of income left after deducting operating expenses from gross income

32
Q

Package mortgage

A

A mortgage covering both real and personal property

33
Q

Partial release

A

A release of a portion of a property from a mortgage

34
Q

PITI

A

(Principal, interest, taxes, and insurance) Most residential mortgage payments include the above

35
Q

Plottage

A

The appraisal principle that holds that merging separately owned pieces of property into one large single lot will increase the value of the separate piece

36
Q

Point

A

One percent of the principal or face amount of the mortgage

37
Q

Power of sale

A

Allows a mortgagee to conduct a foreclosure sale without first going to court

38
Q

Private mortgage insurance (PMI

A

Insures top 20-25% of a loan to protect lender against losses

39
Q

Purchase money mortgage

A

A mortgage given by the buyer to the seller in lieu of cash at closing

40
Q

Real estate settlement procedures act (RESPA)

A

A federal law that deals with procedures to be followed in certain types of real estate closings

41
Q

Regulation Z

A

(Truth in lending) A federal law requiring certain disclosures when extending or advertising credit

42
Q

Renegotiable rate mortgage

A

A long-term mortgage with a note that must be renegotiated at three to five year intervals

43
Q

Reverse mortgage

A

The lender makes payments to a homeowner who later repays in a lump sum

44
Q

Secondary mortgage market

A

A market created to provide liquidity for mortgage financing

45
Q

Special assessment

A

A special tax levied to pay for a specific improvement, such as sidewalks, sewers, etc

46
Q

Subordination agreement

A

An agreement where a junior lien agrees to remain junior even when senior lien’s are removed

47
Q

Subordination

A

A process in which the holder of a superior mortgage agrees to give up his priority position

48
Q

Tax sale

A

(Tax certificate, Tax deed) A sale, normally an auction of property that is in default of taxes assessed against it. Title to the property is passed by a tax certificate or deed

49
Q

Usury

A

The lending of money at greater than the maximum rate allowed by law

50
Q

Wraparound mortgage

A

A refinancing technique in which the new lender assumes payments of the existing mortgage, and gives a new increased mortgage to the borrower at the higher interest rate. The new mortgage “wraps around” the original mortgage

Real Estate Exam Prep (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions