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Real Estate National Key Facts > N6 Financing > Flashcards

N6 Financing Flashcards

1
Q

Leverage

A

Using borrowed money to increase the rate of return.

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2
Q

Promissory Note

A

Evidence of Debt.

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3
Q

The promissory note is ____ usually recorded.

A

NOT

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4
Q

The document that hypothecates real property as security for a debt .

A

Mortgage or Deed of Trust

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5
Q

The mortgage or deed of trust is usually recorded to establish ________ of the lien.

A

priority

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6
Q

The document that names the property as collateral and includes a legal description.

A

Mortgage or Deed of Trust

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7
Q

Fully Amortized Loan

A

A loan in which the monthly payment of principal and interest is level and constant.

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8
Q

The amount of money borrowed.

A

Principal

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9
Q

Charge made to borrow money.

A

Interest

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10
Q

The interest on real estate loans is usually _____.

A

Simple Interest

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11
Q

When one payment on a loan (usually at the end of the loan term) is larger than the regular monthly payment.

A

Balloon Payment

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12
Q

A Budget Loan’s payments include:

A

PITI ( Principal, Interest, Taxes, and Insurance)

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13
Q

In a budget loan, the taxes and insurance are held in an _______ account, aka a _____ account or ____ account.

A

escrow, reserve, impound account

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14
Q

A loan in which payments are interest only is a ____ loan AKA a ______ loan.

A

Straight or Term loan

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15
Q

A loan in which the payment does not even cover the interest due and which causes the principal balance to increase.

A

Negative Amortization Loan

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16
Q

The pattern of payments (payment, interest rate, etc.) are found in the _____.

A

Promissory Note

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17
Q

Payments on real estate loans are made in ____.

A

arrears

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18
Q

An FHA Loan is insured by the _____.

A

Federal Housing Administration

19
Q

A VA Loan is guaranteed by ______.

A

The Department of Veteran Affairs

20
Q

Conventional Loan

A

A loan made with no government insurance or guarantee .

21
Q

Purchase Money Loan or Seller Carry Back

A

A loan in which the seller is the lender .

22
Q

A seller carryback loan in which a seller remains liable for an existing loan is a _____.

A

Wrap Around Loan

23
Q

A loan in which the interest rate may change.

A

Adjustable Rate or ARM Loan

24
Q

A loan in which the payments are lower in the early years and larger in later years.

A

Graduated Payment Loan

25
Q

A Blanket Loan is Secured by _______.

A

one or more properties

26
Q

A package Loan includes:

A

Personal Property

27
Q

A loan which allows a borrower to borrow more money within the same loan.

A

Open End Loan

28
Q

A loan in which funds are advanced as building progresses.

A

Construction or Interim Loan

29
Q

Take-Out -Loan

A

The normal, long term financing that pays off a construction

30
Q

A short term loan that fills the gap between the time a construction loan expires and a take-out loan is placed or enable a buyer of a home to borrow money on a home the buyer is trying to sell.

A

GAP, Swing, or Bridge Loan

31
Q

Loan where lender makes payments to the borrower.

A

Reverse Annuity Loan

32
Q

A loan with higher priority than another loan.

A

Superior Loan

33
Q

Junior Loan

A

A loan with lower priority than the other loan.

34
Q

Non-recourse Loan

A

borrower has no personal liability for the debt.

35
Q

Acceleration Clause

A

A loan clause that allows the lender to declare the debt all due and payable.

36
Q

A clause that allows the lender to declare the loan all due and payable if the property is sold.

A

Alienation Clause or Due on Sale Clause

37
Q

A clause that allows a lender to make an extra charge if the loan is paid off early is a ______.

A

Pre-Payment Penalty Clause

38
Q

Defeasance Clause

A

A clause in a mortgage that states the mortgage is null and void when the note is paid off.

39
Q

A clause calling for individual parcels to be released from a blanket loan.

A

Release Clause

40
Q

A clause which calls for a higher priority loan to be placed in a lower priority position to another loan.

A

Subordination Clause

41
Q

Usury

A

Charging more than the lawful rate.

42
Q

The Interest Rate Specified in the Note.

A

contract rate, aka the nominal rate

43
Q

The rate that would apply when no specific rate is stated in the note.

A

The Legal Rate

Real Estate National Key Facts (14 decks)

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