Loan programs and fees - key terms Flashcards
A loan that meets the qualifying standards established by Fannie Mae or Freddie Mac and, sus, can be sold on the secondary market
Conforming loan
A loan that is not guaranteed or insured by a government agency
Conventional loan
An added loan fee charged by a lender to increase the yield on a lower than market interest rate loan and make it competitive with other higher interest loans. One point equals one percent of the loan amount. Every point that the lender receives will increase the return by approximately 1/8 of 1%.
Discount points
Also called buydown
A mortgage loan insured by the federal housing administration that protects the lender against losses from default
FHA insured loan
A loan that does not meet the qualifying standards set by Fannie Mae and Freddie Mac and, thoughts, cannot be sold on the secondary market
Non-conforming loan
A fee charged by a lender to cover the administrative cost of making a loan, usually based on a percentage of the loan amount
Origination fee
A loan placed at high interest rates for hard to finance borrowers or properties
Private investor loan
Also called hard money loan
Insurance offered by private companies to insure a lender against a borrowers default on a loan
Private mortgage insurance (PMI)
A loan with a higher interest-rate than a conventional loan, generally due to the credit worthiness of the borrower or the size of the loan amount
Subprime loan
A charge to hire a tax service company to inform a lender when property taxes are due and payable
Tax Service fee
A charge impose to underwrite a new loan
Underwriting fee
A guarantee loan made to eligible veterans through the department of Veterans Affairs for the purchase or construction of a home
VA guaranteed loan
