Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Real Estate P&P > Real Estate Financing > Flashcards

Real Estate Financing Flashcards

(50 cards)

Start Studying
1
Q

PITI

A

principal, interest, taxes, insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

DTI

A

debt to income ratio

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

LTV

A

loan to value ratio; the amount of the loan as a percentage of the purchase price of the property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Promissory Note

A

financing instrument; a borrower’s personal promise to repay a debt according to the agreed terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Negotiable Instrument

A

the payee who holds the note may transfer the right to receive payment to a third party

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Payor

A

buyer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Payee

A

lender

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Interest

A

a charge for the use of money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Arrears

A

payments made at the end of a period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Usury

A

charging interest in excess of the maximum rate allowed by law

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

State Usury Laws

A

do not apply to federally related residential first mortgage loans as of March 31, 1980

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Loan Origination Fee

A

charged by most lender to cover the expenses involved in generating the loan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Discount Points

A

used to increase the lender’s yield / rate of return on its investment; one discount point equals 1% of the loan amount (not purchase price)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Prepayment Penalty

A

a payment against the unearned portion of the interest for any payments made ahead of schedule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Financing Instrument

A

creates the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Security Instrument

A

specifies the property that the debtor will use as collateral for the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Hypothecation

A

the debtor retains the right of possession and control of the secured property, while the creditor receives an equitable right in the property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Mortgage

A

a lien on the real property of a debtor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Mortgagor

A

the borrow who receives a loan and in return gives a promissory note and mortgage to a lender

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Mortgagee

A

the lender of the loan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Satisfaction of Mortgage

Study These Flashcards
A

the document that verifies that the loan is paid in full; filed in the public record as evidence of the removal of the security interest

22
Q

Lien Theory

Study These Flashcards
A

the mortgagor retains both legal and equitable title to property that serves as security for a debt; the mortgagee has a lien on the property

23
Q

Deed of Trust

Study These Flashcards
A

conveys bare legal title (w/o right of possession) from the borrower/trustor to a third party / trustee

24
Q

Title Theory

Study These Flashcards
A

the borrower is the trustor who conveys legal title to the trustee but retains equitable title and the right of possession; legal title is returned only when the debt is paid in full

25
Acceleration Clause
if the borrower defaults the lender has the right to accelerate the maturity of the debt; the entire principle balance is due and payable immediately
26
Defeasance Clause
the lender is required to execute a satisfaction of mortgage; returns to the buyer all interest in the real estate originally conveyed to the lender
27
Assumption of Mortgage
the buyer assumes the mortgage or deed of trust and agrees to pay the debt
28
Alienation Clause
resale clause; provides that when the property is sold, the lender may either declare the entire debt due immediately or permit the buyer to assume the loan at an interest rate acceptable to the lender
29
Priority of Liens
determined in the order by which they were recorded
30
Straight Loan
interest-only loan; borrower makes periodic payments of interest only, followed by the payment of the principal in full at the end of the term
31
Amortized Loan
pays interest as well as a portion of the principal owed
32
Adjustable Rate Mortgage (ARM)
begins at one rate of interest, then fluctuates up or down during the loan term based on a specified economic indicator
33
Margin
the interest rate is the index rate plus a premium; the premium represents the lender's cost of doing business
34
Negative Amortization
the amount of the loan increasing instead of decreasing; can happen when property values do not increase as anticipated or the borrower can no longer afford to make mortgage payments
35
Growing-Equity Mortgage
rapid-payoff mortgage; uses a fixed interest rate but payments of principal are increased according to an index or schedule - used when a borrower's income is expected to grow to keep pace with increasing loan payments
36
Balloon Payment
a final payment that is at least twice the amount of any other payment
37
Reverse Morgage
allows a homeowner age 62 or older to borrow money against the equity built up in the home
38
Foreclosure
a legal procedure in which property pledged as security for a debt is sold to satisfy the debt when a borrower defaults on any required payment or fails to fulfill any of the other obligations set forth in the mortgage or deed of trust
39
REO
real estate owned; lender portfolio of property
40
Judicial Foreclosure
allows the property to be sold by court order after the morgagee has given sufficient public notice
41
Nonjudicial Foreclosure
used when the security instrument contains a power of sale clause; no court action is required
42
Strict Foreclosure
notice is given to delinquent borrower; court establishes a deadline for the balance to be paid in full if it's not paid by that date court awards full legal title to the lender; no sale takes place
43
Deed in Lieu of Foreclosure
carried out by mutual agreement rather than lawsuit; eliminate equity but not junior liens
44
Equitable Redemption
after default but before the foreclosure sale pay off to the lender
45
Statutory Right of Redemption
a period in which defaulted borrowers can redeem their real estate after sale
46
Deficiency Judgement
if the foreclosure sale does not produce enough to pay the loan balance in full the morgagee may be entitled to a personal judgment against the borrower for the unpaid balance
47
Short Sale
a sale in which the sales price is less than the remaining indebtedness
48
Forebearance
a postponement of obligations under a mortgage loan but not forgiveness of the debt
49
Basic Form Homeowners Insurance
fire and lightening, glass breakage, windstorm, explosion, riot, damage by aircraft of vehicle, smoke damage, vandalism and theft
50
Broad Form Homeowners Insurance
falling objects, ice damange, collapse, burst HVAC and pipe, freezing of plumbing and HVAC, electrical damage

Real Estate P&P (21 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions