Financing Flashcards
Veterans Administration
The VA will guarantee 60% of a loan amount not to exceed a total guarantee of $36,000
Origination fee
Origination fee is the loan fee or sometimes is referred to as the discount fee
Three day right recession
The three-day right of recession only applies when A lien can be placed on a persons home that he already owns.
Junior mortgage
The Junior mortgage is secondary financing
The function of the Federal housing administration FHA is to
Insure loans
Mortgage brokers
Mortgage broker does not issue loans but they locate borrowers and lenders as an intermediary. They do charge a loan fee.
Locate borrowers , find lenders, and process applications.
Mortgage bankers
Mortgage bankers are in the business ofl originating, selling, and servicing loans
Subject to mortgage
A buyer purchasing property with a subject to mortgage is not liable for any deficiencies. Would be most beneficial to a buyer
Hypothecation
Is when a lender allows a borrow to possess pledged real estate for use
Federal housing administration FHA
The FHA lends money to qualified individuals
FHA
The FHA does not lend any money. The FHA administers an insurance program that allows home buyers to borrow almost the full purchase price with a low down payment. (insures loans)
Wrap around mortgage
A wraparound mortgage incorporates existing mortgages and becomes subordinate to them
Truth in lending law
The truth and lending law requires disclosure to mortgage applicants
(To inform mortgage applicants of the cost of obtaining the loan)
Closing attorney
The closing attorney is responsible for prorating the expenses between the parties
Fannie Mae
Fannie Mae does not lend money its part of the secondary mortgage market
Regulation Z
Regulation Z of the truth in lending law requires that a meaningful disclosure must be given to the borrower regarding the cost of obtaining credit
A purchase money mortgage
In a purchase money mortgage, the seller finances the sale of the property by lending the money to the buyer
Origination fees
The origination fee is the loan fee or sometimes is referred to as the discount fee
Discount rate
The federal discount rate has the greatest effect on persons interest rate. Federal Reserve Board will adjust its rate to encourage or discourage member banks to increase the supply of money
Three main types of mortgages
Conventional, private backed mortgages, and government-backed mortgages such as FHA VA, etc.
A commitment letter
A letter of commitment for a loan is issued by a lender after a review of the credit report of the borrower and an analysis of real estate asset. The letter contains the amount of the loan, the loan interest rate, and repayment options
Mortgagee
Is the lender
Deferred purchase money mortgage
A property sold with a second mortgage taken by the owner is a deferred purchase money mortgage. Sometimes the interest do is paid monthly or deferred as well
An assumption mortgage
This is because the buyer agrees to assume and make himself personally responsible for payment
The Defeasance clause
Defeasance clause are used in a mortgage that states that the lender will return title to the borrower once the depth or loan has been paid in full
Purchase money mortgage
In a purchase money mortgage, the seller finances the sale of the property by lending the money to the buyer
MGL 140C
Massachusetts as it’s own truth in lending law (TIL) known as MGL CH 140 C
RESPA
Stands for real estate settlement procedures act that requires all settlement charges be itemized to buyers and sellers of 1 to 4 unit family residence and was passed in 1974
