N6 Financing Flashcards
Leverage
Using borrowed money to increase the rate of return.
Promissory Note
Evidence of Debt.
The promissory note is ____ usually recorded.
NOT
The document that hypothecates real property as security for a debt .
Mortgage or Deed of Trust
The mortgage or deed of trust is usually recorded to establish ________ of the lien.
priority
The document that names the property as collateral and includes a legal description.
Mortgage or Deed of Trust
Fully Amortized Loan
A loan in which the monthly payment of principal and interest is level and constant.
The amount of money borrowed.
Principal
Charge made to borrow money.
Interest
The interest on real estate loans is usually _____.
Simple Interest
When one payment on a loan (usually at the end of the loan term) is larger than the regular monthly payment.
Balloon Payment
A Budget Loan’s payments include:
PITI ( Principal, Interest, Taxes, and Insurance)
In a budget loan, the taxes and insurance are held in an _______ account, aka a _____ account or ____ account.
escrow, reserve, impound account
A loan in which payments are interest only is a ____ loan AKA a ______ loan.
Straight or Term loan
A loan in which the payment does not even cover the interest due and which causes the principal balance to increase.
Negative Amortization Loan
The pattern of payments (payment, interest rate, etc.) are found in the _____.
Promissory Note
Payments on real estate loans are made in ____.
arrears
An FHA Loan is insured by the _____.
Federal Housing Administration
A VA Loan is guaranteed by ______.
The Department of Veteran Affairs
Conventional Loan
A loan made with no government insurance or guarantee .
Purchase Money Loan or Seller Carry Back
A loan in which the seller is the lender .
A seller carryback loan in which a seller remains liable for an existing loan is a _____.
Wrap Around Loan
A loan in which the interest rate may change.
Adjustable Rate or ARM Loan
A loan in which the payments are lower in the early years and larger in later years.
Graduated Payment Loan
A Blanket Loan is Secured by _______.
one or more properties
A package Loan includes:
Personal Property
A loan which allows a borrower to borrow more money within the same loan.
Open End Loan
A loan in which funds are advanced as building progresses.
Construction or Interim Loan
Take-Out -Loan
The normal, long term financing that pays off a construction
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.
GAP, Swing, or Bridge Loan
Loan where lender makes payments to the borrower.
Reverse Annuity Loan
A loan with higher priority than another loan.
Superior Loan
Junior Loan
A loan with lower priority than the other loan.
Non-recourse Loan
borrower has no personal liability for the debt.
Acceleration Clause
A loan clause that allows the lender to declare the debt all due and payable.
A clause that allows the lender to declare the loan all due and payable if the property is sold.
Alienation Clause or Due on Sale Clause
A clause that allows a lender to make an extra charge if the loan is paid off early is a ______.
Pre-Payment Penalty Clause
Defeasance Clause
A clause in a mortgage that states the mortgage is null and void when the note is paid off.
A clause calling for individual parcels to be released from a blanket loan.
Release Clause
A clause which calls for a higher priority loan to be placed in a lower priority position to another loan.
Subordination Clause
Usury
Charging more than the lawful rate.
The Interest Rate Specified in the Note.
contract rate, aka the nominal rate
The rate that would apply when no specific rate is stated in the note.
The Legal Rate
