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Financing > Financing > Flashcards

Financing Flashcards

1
Q

Name Mortgage Loan Elements

A

P.I.T.I.
Principal
Interest
Taxes
Insurance
Sometimes Private Mortgage Insurance

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2
Q

What are the 3 ways to pay off a loan?

A

Term (also a straight) Loan
Fully amortized loan
Partially amortized loan

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3
Q

Term loan is also known as

A

A straight loan or an interest-only loan

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4
Q

What loan type has a balloon payment at the end of the loan

A

Partially amortized loan

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5
Q

What type of loan has a zero payment at maturity?

A

Fully amortized loan

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6
Q

features of a promissory note

A

Borrower & lender
promise to repay
amount of debt
terms of repayment
interest rate

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7
Q

Mortgage

A

Pledge of property as collateral against a debt
Creates a lien

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8
Q

Elements of a Mortgage

A

Acceleration clause
Defeasance clause
Alienation clause
Power of sale clause

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9
Q

Definition of acceleration

A

Lender can call the loan early due to non-payment

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10
Q

definition of defeasance clause

A

Loan is paid off or “defeated” and recorded

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11
Q

definition of Power of Sale

A

Gives mortgagee (lender) right to foreclose without going to court (non-judicial foreclosure)

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12
Q

definition Loan-to-Value

A

Maximum percentage of value that a lender will load.
Based on the lesser of appraisal or price

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13
Q

Discount points

A

Buyer buys points for interest rate discount.
1 point costs 1% of the loan amount

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14
Q

definition of Ursury

A

charging an interest rate about the legal maximum

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15
Q

What are the 5 major types of Loans

A

Conventional
Insured Conventional
FHA
VA
USDA

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16
Q

Which loan type requires a 20% down payment

A

Conventional

17
Q

Which loan type allows for less than a 20% down payment

A

Insured Conventional

18
Q

Which loan type allows for a loan-to-value greater than 80%?

A

Insured Conventional

19
Q

Definition of a Package Mortgage

A

Covers real estate and personal property

20
Q

Which loan type includes a partial release clause?

A

A blanket mortgage.
(Used primarily for developers building out sub-divisions. As lots are developed & sold the loan is “partially” released for that lot.)

21
Q

Home Equity Loan vs. Home Equity Line of Credit

A

Loan is for a set amount and creates a second mortgage
Line of Credit - borrower can take advances against the equity in their home. Not a loan. Can make withdrawals at will.

22
Q

definition bridge loan

A

A short term loan for buyers to bridge the gap between buying a new home and selling existing home.

23
Q

What loan type has lower payments at the beginning that increase gradually over 3 to 7 years?

A

A graduated payment mortgage

24
Q

What loan type includes P.I.T.I.?

A

A budget mortgage.
ALSO fully amortized

25
Q

Mortgagee pay the mortgagor’s monthly payment, is what type of loan?

A

Reverse annuity Mortgage

Financing (2 decks)

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