Mortgage Loan Products and Characteristics Flashcards

1
Q

Interest Only Loan

A

No principal paid

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

Negatively Amortizing (NegAm) Loan

A

minimum payment is made but the payment is less than what is necessary to cover the interest expense generated.

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

Adjustable Rate Mortgage

A

Interest can vary, therefore the P and I payment can

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

Fixed Rate Mortgages

A

P&I payments stay the same over the life of the loan.

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

Balloon Payment Mortgage

A

Only partial amortization, meaning that amount of monthly payments due are calculated over a certain term (30 years) but the outstanding principal balance is due at some point short of that term, which is when the outstanding principal amount left on the loan must be paid in full.

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

Senior/Junior Liens

A

First liens that are paid off are the senior, then junior.

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

Open End & Closed End

A

Closed End Loan: fully amortizes over a period of time (home equity loan), and an open end loan establishes a credit limit and anticipates multiple transactions within that limit (home equity line of credit)

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

Prime Loans

A

little risk to lender/investor, priced favorably for borrower. Underwritten by agency guidelines of FNMA, FHLMC, or Government

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

Finance Charge

A

Interest expenses and other closing costs the borrower will pay as a cost or an expense over the term of the loan.

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