Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Principles of Real Estate 2 > Module 2 > Flashcards

Module 2 Flashcards

1
Q

The process of making a lending decision

A

Underwriting

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

The process of creating a new mortgage loan

A

Origination

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

The practice of refusing to provide financing in a particular location

A

Redlining

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

The market in which borrowers and lenders come together to create and negotiate the terms of a mortgage transaction

A

Primary mortgage market

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

The legal procedure under which property may be sold to satisfy an unpaid promissory note

A

Foreclosure

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

Closing of a real estate transaction is called

A

Consummation

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

All of the following are mortgage lending activities except:

Loan origination
Promissory Note
Closing
Funding

A

The Promissory Note is not a mortgage lending activity.

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

The legal procedure whereby the secured property can be sold to satisfy the unpaid promissory note is called:

A

foreclosure

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

All of the following are part of the primary mortgage market except:

Mortgage Brokers
Correspondent lenders
fannie mae
mortgage bankers

A

Fannie Mae is not a part of the primary mortgage market.

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

The pledge of the property as security of repayment of the note is called:

A

The pledge of the property as security of repayment of the note is called mortgage.

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

A real estate lien note is also known as:

A

A real estate lien note is also known as a promissory note.

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

Benefits of Pre-Qualification

A

Buyers can be more realistic when setting pricing goals
The buyer’s agent has a better understanding of the buyer’s ability to pay
The buyer’s agent can avoid showing properties that the buyer cannot afford
Sellers are somewhat reassured that the buyer has sufficient income and credit to close

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

Created in 1938 to bring stability to the US housing market, this privately-owned company plays a vital role in financing mortgages and increasing home ownership opportunities in the U.S.

A

Fannie Mae

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

A federal law that ensures that all consumers are given an equal chance to obtain credit by prohibiting discrimination in any aspect of the credit transaction.

A

ECOA

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

This government owned association operates the mortgage-backed securities program in the U.S.

A

Ginnie Mae

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

This federal agency is responsible for enforcing federal consumer financial law.

A

CFPB

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

A federal law designed to protect consumers in credit transactions by requiring clear disclosure of key terms of lending arrangement and all the associated costs.

A

TILA

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

This federal law enhances consumer protection by establishing minimum standards for the licensing and registration of state licensed mortgage loan originators and by establishing a nationwide mortgage licensing system.

A

SAFE Act

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

This chartered corporation was created to increase the supply of funds that mortgage lenders can make available to homeowners and multi-family investors.

A

Freddie Mac

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

This federal law was passed to ensure that banks would do business in the communities in which they are chartered to do business.

A

CRA

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

The Loan Estimate must be provided no later than ____ business days after the lender receives the loan application.

A

3

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The Federal Reserve uses three primary monetary policy tools to influence the cost and availability of credit.

A

T

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

The yield on the loan is determined by the interest rate charged on the loan and the discount points.

A

T

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Banks must hold a percentage of deposits in reserve in cash or at a reserve bank.

A

T

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
A par loan is a loan with no discount points.
T
26
TILA and RESPA were integrated into one disclosure using two documents: the Loan Estimate and the HUD-1.
F
27
The Federal Reserve manages the secondary market.
F
28
All borrowers who apply on the same day receive the same interest rate.
F
29
Monthly payment in a loan is referred to as:
Monthly payment in a loan is referred to as P&I.
30
In this type of loan, the interest can change at scheduled intervals throughout the loan.
With Adjustable Rate Mortgages, the interest can change at scheduled intervals throughout the loan.
31
In this type of loan, monthly payments include both principal and interest throughout the term of the loan until the principal is repaid.
With Fully amortized loans, monthly payments include both principal and interest throughout the term of the loan until the principal is repaid
32
In an ARM, the lender usually offers a lower interest during the first year or more of the loan, called:
In an ARM, the lender usually offers a lower interest during the first year or more of the loan, called Discounted Initial Rate.
33
This is the interest rate limit over the life of an Adjustable Rate Mortgage
Lifetime cap is the interest rate limit over the life of an Adjustable Rate Mortgage.
34
All of the following are advantages of interest-only ARM loans except: invest the cash flow buy more house protects against a real estate bubble pay principle
Protecting against a real estate bubble is not an advantage of interest-only ARM loans.
35
All of the following are advantages of ARM loans except: Unpredictable loan payment higher loans falling interest rates lower interest rates,
Lower interest rates are not an advantage of ARM loans.
36
A ___________ Mortgage covers more than one piece of property
A Blanket Mortgage
37
A _____________ mortgage includes both real and personal property (fixtures and furnishings).
Package
38
A purchase with the intent to refurbish a property would need this type of loan.
Construction to permanent loan
39
A loan that has two or more lenders who share in financing and in risk of the loan.
participation loan
40
Allows a homeowner who is 62 or older to borrow equity from their home without making payments.
reverse annuity mortgage
41
A partially amortized loan with a final payment that is substantially higher than the other payments.
balloon note
42
A loan to finance both real property and personal property in the same loan.
package mortgage
43
Asset-based financing made by a private investor.
collateral dependent loan
44
Financing that preserves the low, existing interest rate on the original note with seller financing on a new note.
wraparound mortgage
45
A loan that includes principal, interest, taxes, and insurance in the monthly payment.
budget mortgage
46
A type of seller financing wherein the seller retains title to the property until the balance of the note is repaid.
contract for deed
47
Sarah wants to upgrade to a new, larger home for her and her two young daughters. Recently divorced, she has listed the home she and her ex-husband shared and is looking for homes in the low $300,000s in her daughters’ school district. As a Certified Registered Nurse Anesthetist (CRNA), Sarah has a gross annual income of $158,250. She has decided to apply for a conventional loan, and because she has excellent credit, she qualifies for a lower interest rate. Sarah currently has fixed monthly obligations totaling $1,760. What maximum monthly house payment does she qualify for using the front ratio?
$158,250/12 months = $13,187.50 monthly income x .28 = $3,692.50
48
Sarah wants to upgrade to a new, larger home for her and her two young daughters. Recently divorced, she has listed the home she and her ex-husband shared and is looking for homes in the low $300,000s in her daughters’ school district. As a Certified Registered Nurse Anesthetist (CRNA), Sarah has a gross annual income of $158,250. She has decided to apply for a conventional loan, and because she has excellent credit, she qualifies for a lower interest rate. Sarah currently has fixed monthly obligations totaling $1,760. What is the maximum she can qualify for using the back ratio?
$158,250/12 months = $13,187.50 monthly income x .36 = $4,747.50
49
Sarah wants to upgrade to a new, larger home for her and her two young daughters. Recently divorced, she has listed the home she and her ex-husband shared and is looking for homes in the low $300,000s in her daughters’ school district. As a Certified Registered Nurse Anesthetist (CRNA), Sarah has a gross annual income of $158,250. She has decided to apply for a conventional loan, and because she has excellent credit, she qualifies for a lower interest rate. Sarah currently has fixed monthly obligations totaling $1,760. Assuming that she has a total fixed monthly obligation of $1,760, what is the maximum house payment that she can qualify for?
$4747.50 - $1760 monthly debt = $2,987.50
50
PMI insures the top __________% of the loan
20%
51
MIP ensures the _________ loan
entire
52
PMI is found on __________________________ Loans
high LTV Conventional
53
A loan that meets the standards of Fannie Mae and Freddie Mac.
conforming loan
54
The ratio of the borrower’s total recurring monthly debts and house payment as part of the borrower’s gross monthly income.
back ratio
55
A loan that is neither federally insured nor guaranteed.
conventional loan
56
The percentage of the lesser of the appraised value or the sales price that the lender is willing to lend.
loan to value
57
A special insurance designed to allow the lender to increase the LTV ratio.
PMI
58
A ratio of the proposed house payment as part of the borrower’s gross monthly income.
front ratio
59
True or False: FHA loan programs include a balloon loan.
F
60
True or False: FHA had an influence on real estate financing by creating standards for borrower qualification.
T
61
True or False: MIP is paid only once, at closing.
F
62
True or False: Mortgage insurance on an FHA loan is called MIP.
T
63
True or False: FHA loans are for U.S. citizens only.
F
64
True or False: The LTV on an FHA is as high as 96.5%.
T
65
True or False: FHA allows for the use of non-traditional credit for borrower’s who do not have an established credit history.
T
66
True or False: A purchaser of a residential rental property may obtain an FHA loan.
F
67
True or False: A purchaser of a working ranch may obtain an FHA loan.
F
68
True or False: FHA insurance is for the whole loan amount.
T
69
Sum of regular debt plus house payment as a percentage of monthly income.
Back ratio
70
Housing Assistance Program
VLB
71
A loan with no discount points
Par Loan
72
Mortgage insurance found on an FHA loan
MIP
73
Where investors purchase loans
Secondary Market
74
House payment as a percentage of income
Front Ratio
75
Government rural loan
USDA Section 502 loan
76
Default insurance on a conventional loan
PMI
77
Percentage of sales price lender will finance
LTV
78
Collateral-dependent loan
Hard money loan
79
Central Banking System in the United States
Federal Reserve

Principles of Real Estate 2 (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions