Real Estate Vocabulary Exam Flashcards
_____ is the increase in the value of a property due to changes in the value of a property due to changes in market conditions, inflation, or other causes
Appreciation
When a mortgage is transferred from one company or individual to another it is called ____?
Assignment
A _____ mortgage loan that requires the remaining principal balance be paid at a specific point in time.
Balloon Mortgage
Name two reasons why bridge loans are not used much anymore.
- More second mortgage lenders now will lend at a high loan to value
- Sellers would rather accept offers from buyers who have already sold their property.
____ is a title free of liens or legal questions as to ownership of the property.
Clear Title
It is clear because there can be no challenges made to its legality.
What is the collateral in a home loan and why?
The property itself because;
the borrower risks losing it if he does not repay according to the terms of the mortgage or deed of trust.
What is the adjustment rate date on an adjustable-rate mortgage?
The date the interest rate changes
_____ is the kind of deposit made by a potential buyer to show he is serious about buying a house.
Earnest Money Deposit
A ___ is a right-of-way that gives persons other than the owner legal access to or over a property.
Easement
What is the definition of a “sub-division”
A housing development created by dividing a tract o land into individual lots offered for sale or lease.
______ Equity is the contribution to the construction of or rehabilitation of a property in the form of labor or services rather than cash.
Sweat Equity
What is the definition of a two step mortgage?
A two-step mortgage starts out with one rate for the first five or seven years and then changes to a different rate for the remainder of the term of the mortgage amortization.
__ is a legal document evidencing a person’s right to or ownership of a property.
Title
______ is a written document that transfers personal property from one owner to another.
Bill of Sale
a _____ is an oral or written agreement that is binding in a court of law
Contract
A ____ is a purchase price of a property that the buyer pays in cash and does not finance with the mortgage.
Usually given in cash at the time of finalizing the transaction.
Down Payment
_____ is a female named in a will to administer an estate.
Executrix
_____ is the greatest possible interest a person can have in real estate
Fee Simple
_____ is required in federally designated flood areas and does compensate for physical property damage resulting from flooding.
Flood Insurance
What is true about government loans?
They are either insured by FHA, guaranteed by the Department of Veterans Affairs (VA), or guaranteed by the Rural Housing Service (RHS)
_____ are not government loans.
Conventional Loans
____ is a person conveying interest in real property to another party.
The Grantor
_____ is a type of insurance that covers in the event of physical damage to a property in the form of fire, wind, vandalism, or other hazards.
Hazard Insurance
What is the definition of a liquid asset?
A liquid asset is either cash or something easily turned into cash.
What is another term for a lender in a mortgage agreement?
Mortgagee
What is owner financing?
When a seller provides all or part of the financing.
A ____ is 1% of the amount of the mortgage.
Point
What is a power of attorney?
A person who derives power from a legal document and grants someone complete or limited authority on behalf of someone.
_______ is the amount borrowed or remaining unpaid, as well as the part of the monthly payment that reduces the remaining balance of a mortgage.
Principal
______ a written promise to repay a specific amount over a specified period of time
Promissory Note
What is the definition of a real estate agent?
A licensed person who negotiates and transacts the sale of real estate.
_____ takes place when a buyer assumes the sellers mortgage in a transaction.
An Assumption
A ____ is a legal document conveying title to a property.
Deed
Which type of clause allows a lender to demand payment if the borrow defaults on the loan or transfers title to another without informing the lender.
Acceleration Clause
What is the most popular type of Bankruptcy and what does it entail?
Chapter 7 No Asset Bankruptcy;
Relieves the borrower of most types of debts.
What is the definition of a “Broker”?
A broker is one who can;
- own a real estate firm
- work for another broker who owns a firm
- broker loans in the mortgage industry
-Anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee
When a ______ is in a sales contract, a purchaser is able to obtain a satisfactory home inspection from a qualified inspector. This condition has to be met before the contract is legally binding.
Normal Contingency
____ Loans are home loans that are not VA or FHA loans. Usually through a bank or mortgage company.
Conventional Loans
A _____ is a report of someones credit history which is prepared by a credit bureau and used by a lender in the loan qualification process. Determines a loan applicants credit worthiness.
Credit Report
What is the definition of a “default”?
Failure to make the mortgage payment within a specified period of time, usually 30 days for first mortgages or first trust deeds, causes a loan to be in default.
______ is a term used by appraisers to estimate the physical condition of a building.
- May differ from the buildings actual age*
- May be shorter or longer than the effective age*
Effective Age
Definition of Equity
- Difference between fair market value and what is stil owed on the mortgage and any other liens
- A Homeowners financial interest in a property
____ is an improvement that illegally intrudes onto another person property. An easement would be the legal version of this.
Encroachment
A ____ is a government loan that is not a VA Loan
FHA Mortgage insured by the Federal Housing Administration
____ is a person to who an interest in real property is conveyed.
Grantee
Definition of a Home Equity Line of Credit
A mortgage loan usually in second position; allows a borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.
Who owns the property in joint tenancy if one of the tenants dies?
The remaining tenant
_____ is a legal claim against a property that must be paid off when it is sold.
Lien; such as a mortgage or first trust deed.
What is a “lock-in”?
A rate guaranteed by the lender for a certain period of time at a certain cost to the buyer
_____ is the right of the government to take private property for public use upon payment of its fair market value.
Eminent Domain
____ is a mortgage with a lien position subordinate to the first mortgage.
Second Mortgage
What is an “adjustable rate mortgage’’?
The interest rate adjusts periodically, according to corresponding fluctuations in an index.
_____ is a table showing how much of each payment is applied to interest and how much to principal.
Also shows the gradual decrease of the loan balance until it reaches zero.
Amortization Schedule
_____ is a mortgage where payments are made every two weeks instead of once a month.
Bi-Weekly Mortgage
What is a “Cap”?
Limitation on how much the loan may adjust over a period of time and for the life of the loan
When is a real estate transaction officially “closed”?
- When the closing documents have been recorded at the local recorders office
- When all the documents are signed and money changes hands
_____ is a record of an individuals repayment of debt
Credit History
What is a “Due-On-Sale” Provision?
Allows a lender to demand repayment in full if the borrower sells the property that serves as a security for the mortgage
______ is the sum total of all the real and personal property owned by an individual at the time of death.
Estate
_____ is a written contract that allows a licensed real estate agent the exclusive right to sell a property for a specified time.
Exclusive Listing
What are two ways “Fair Market Value” could be defined.
- The most a buyer, willing but not compelled to buy would pay
- The lowest a seller willing but not compelled to sell would accept
_____ is a lenders agreement to make a loan to a specific borrower on a specific property.
Firm Commitment
____ is when personal property is attached to real property in a permanent manner to real estate
Fixture
____ is a thorough inspection by a professional that evaluates the structural and mechanical condition of the property.. Often a contingency in a contract that it turns out satisfactory.
Home Inspection
What is “Homeowners Insurance”?
Combines personal liability insurance and hazard insurance coverage for a dwelling and its contents
What options does a lease entail?
- Alternative to financing, which allows home buyers a lease to own option
- May consist of an additional amount which can be applied toward the down payment on an already specified price
_____ is a sum of borrowed money generally repaid with interest.
Loan
What is a “Legal Description”?
Describes the property and is recognized by law; sufficient to locate and identify the property without oral testimony.
_____ is the date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
Maturity
Definition of ‘Mortgagor”
Borrower in a mortgage agreement.
____ is any property not part of the real property.
Personal Property
____ is a penalty charged to a borrower who pays off a loan before its due
Prepayment Penalty
What is the definition of “Pre-Approval”?
A borrow has;
- Completed a loan application
- Provided debt, income, and savings documentation that has been reviewed and approved by an underwriter.
_____ must equal the cash amount that the borrower would have to pay for principal, interest, taxes, and insurance for a predefined number of months.
PITI Reserves
What is the purpose of a “public auction”?
to sell property to repay mortgage that is in default
“Realtor” definition
Agent, Broker, or Associate who holds active membership in a local real estate board which is affiliated with the National Association of Realtors
______ applies to the original amortization term minus the number of repayments that have been applied.
Remaining Term
What is “Revolving Debt”?
A credit arrangement (credit card) which allows a customer to borrow against a pre-approved line of credit when purchasing goods or services.
The borrower is billed for the amount that is actually borrowed plus any interest due.
What does a survey show?
- Precise legal boundaries
- Location of improvements
- Easements
- Rights of Way
- Encroachments
- Other physical features
______ is an agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.
Seller Carry-Back
What does a “Title Company” specialize in?
examining and insuring titles to real estate
____ a state or local tax payable when title passes from one owner to another
Transfer Tax
What is a “Truth in Lending”?
Federal law requiring lenders to fully disclose in writing the terms and conditions of a mortgage, including the annual percentage rate and other charges.
A VA mortgage is guaranteed by who?
The department of Veterans Affairs
