National Finance Flashcards
A mortgage or deed of trust
May be recorded
A mortgage or deed does not have to be recorded. If it is recorded it should be done so in the city, county or municipality where the property is located.
When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a “Budget Mortgage or Deed of Trust” occurs. These escrow accounts may also be referred to as
Impound or reserve accounts
If a lender requires tax and/or insurance escrows, a “Budget Mortgage or Deed of Trust” occurs. The money in the escrow account assures the lender that the bills will be paid
When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a “Budget Mortgage or Deed of Trust” occurs. These escrow accounts may also be referred to as
Impound or reserve accounts
If a lender requires tax and/or insurance escrows, a “Budget Mortgage or Deed of Trust” occurs. The money in the escrow account assures the lender that the bills will be paid
Which is true about a promissory note?
It is the primary evidence of loan
A promissory note, or mortgage note, is the promise to repay a mortgage loan and the primary evidence that a loan exists between the lender and borrower.
A lender charges discount points on a loan to
Improve the lenders yield.
The loan amount is $70,000, and the monthly principal and interest payment will be $479.00 a month for 30 years. How much interest will be paid over the term of the loan?
$102,440.00
$479 x 12 = $5,748, $5,748 x 30 = $172,440, $172, 440 - $70,000 = $102,440
A mortgage has a balance of $70,000 at 11.5% interest for a period of 25 years. The monthly P & I payment is $711.53, what is the interest charge for the second monthly payment?
$670.44
$70,000 x 11.5% = $8,050, $8,050 ÷ 12 = $670.83, $711.53 - $670.83 = $40.70, $70,000 - $40.70 = $69,959.30, $69,959.30 x 11.5% = $8,045.32, $8,045.32 ÷ 12 = $670.44
Remember for purposes of determining the new loan balance, you will not have to know how to determine the
Payment amount
For the purposes of the test you will not have to know how to determine the payment amount. This will be given to you. In practice, there are tables and calculators available that you can use to assist buyers by giving them an estimate of what their mortgage payment will be
What kind of loan would be fully paid out over the life of the loan?
Fully amortized loan
Under a fully amortized loan regular payments of principal and interest are made until the entire loan is paid off by the end of the term of the loan.
A type of long term permanent financing for residential construction or large construction projects, that replaces the construction loan is called a (an)
Takeout loan
A takeout loan is a long term permanent financing for large construction projects, which replaces construction loans on large commercial projects
A Budget Mortgage is a loan, which has a payment composed of the following?
Principal, interest, taxes and insurance
A Budget Mortgage is a loan, which has a payment composed of principal, interest, taxes and insurance
For loans with a LTV that have less than a 20% downpayment, a borrower is required to pay
PMI
Private mortgage insurance (PMI) is provided by a private insurer to protect lenders of loans with less than a 20% downpayment.
Settlement is another name for closing and
Brings the real estate transaction to completion
Assets include all of the following, except
Revolving and installment loan accounts
A buyer’s assets include; liquid savings, checking, CD’s, and other personal property or real estate.
Under which of the following would one most likely see an estoppel certificate?
A lender sells a loan and the new mortgagee wants to know the existing balance
An estoppel certificate is used during mortgage negotiations to determine precise facts, such as the outstanding balance due on a loan, which might affect the loan.
