Nat 6

Question 1

Increase in rate of return through using borrowed money

Answer 1

Leverage

Question 2

A personal promise to repay the debt.

Answer 2

Promissory note

Question 3

Hypothecated the property as collateral for the dept

Answer 3

Mortgage or trust deed

Question 4

Level or constant payments including principal and interest

Answer 4

Amortized

Question 5

Payments made PITI

Taxes and insurance go into an escrow account

Answer 5

Budget

Question 6

Interest only during term of loan with principal due at maturity

Answer 6

Straight

Question 7

The monthly payments are less than the interest

Answer 7

Negative amortization

Question 8

Payments on real estate loans are paid in

Answer 8

Arrears

Question 9

Loan that is insured by the federal housing administration HUD

Answer 9

FHA Loans

Question 10

Loan guaranteed by the department of Veterans Affairs

Answer 10

VA Loan

Question 11

Made by lending institutes but with out government guarantee or insurance

Answer 11

Conventional loans

Question 12

Seller carryback financing

Answer 12

Purchase money loan

Question 13

Seller remains liable for the existing loan and agrees to create a new loan for the buyer for a greater amount and at higher interest rates

Answer 13

Wraparound loan

Question 14

Interest rate and payments change periodically during the life of the loan

Arms length

Answer 14

Adjustable rate loan

Question 15

Loan in which payments are lower in the early years but increase in intervals until the loan becomes fully amortized

Answer 15

Graduated payment loan

Question 16

Loan secured with more than one property

Answer 16

Blanket loan

Question 17

Allows borrower to borrow more funds within the same loan.

Like a credit card

Answer 17

Open end loan

Question 18

Funds are advanced in installments as construction progresses

Answer 18

Construction ( interim) loan

Question 19

Normal long term financing replacing and paying off construction loan

Answer 19

Take-out loan

Question 20

The lender makes monthly payments to the borrower

Answer 20

Reverse annuity loan (RAM)

Question 21

Loan which has highest priority

Answer 21

Superior loan

Question 22

Loan that is lower priority to another loan

Answer 22

Junior loan

Question 23

Loan in which the borrower is not held personally liable for the debt
(Without personal liability)

Answer 23

Non-recourse loan

Question 24

Allows lender to declare the loan balance immediate payable if borrower defaults

Answer 24

Acceleration clause

Question 25

Allows lender to declare debt due and payable if property is sold

Answer 25

Alienation clause

Question 26

Allows lender to charge prepayment penalty if loan is paid off early

Answer 26

Prepayment clause

Question 27

States that the note and mortgage are null and void when the borrower pays off the debt
(Defeated)

Answer 27

Defeasance clause

Question 28

Allows individual parcels to be released from a blanket mortgage

Answer 28

Release clause

Question 29

Calls for existing loan to be placed in lower priority position to another lien

Answer 29

Subordination clause

Question 30

Charging more than the rate set by law

Answer 30

Usury

Question 31

The rate specified in the note or contract

Answer 31

Contract rate/ note rate

Question 32

In Arizona this is the rate that would apply when no specific rate appears in an agreement. Also the rate which would apply to judgments unless he court stipulated a different rate

Answer 32

Legal rate