NCh7 Types Of Loans And Loan Programs Flashcards
The type of loan, providing EQUAL REGULAR PAYMENTS of principal and interest until the loan is paid where the interest is paid in arrears at the end of each a payment period, and with each payment, the amount toward the PRINCIPLE INCREASES as the INTEREST DECREASES is called
Fixed rate amortized loan
The type of loan, which is interest only UNTIL THE END OF THE TERM when the entire principle is repaid (this is a zero amortization loan aka straight loan) is called
Term loan
The type of loan COVERING MORE THAN ONE PIECE of property and may contain a release clause, allowing the borrower to obtain partial releases of specific lots by making required lump sum payments is called
Blanket loan
The type of loan that INCLUDES real property PLUS personal property, such as a furnished condominium is called
Package loan
What type of loan INCLUDES principal, interest, taxes, and insurance IN monthly payment known as PITI
Budget loan
What type of loan is partially amortized with a final payment SUBSTANTIALLY LARGER THAN others
Balloon loan
What type of loan has TWO or MORE lenders investing allowing the lenders to share the risk (aka shared appreciation mortgage)?
Participation loan
What type of loan permits ADDITIONAL borrowing on the SAME note, sometimes called a credit card mortgage or home equity line of credit?
Open end mortgage
What type of loan has an interest rate SUBJECT to CHANGE as conditions in the market change?
Adjustable rate mortgage
What type of loan is a short term loan with funds advanced periodically during the stages of CONSTRUCTION?
Construction loan
What type of loan allows homeowner at 62 years of age or OLDER to borrow against their equity without making any payments on the amount borrowed?
Reverse annuity mortgage
What type of loan has RISK-BASED PRICING where the rates are not published and borrowers are rated a through F were prime borrower has an a rating and a minus to F borrowers will pay 1 to 5% higher than those with good credit?
Subprime loan
What is the purpose of a pre-payment penalty?
To protect the lender from loss of interest
