Types Of Financing

Question 1

Adjustable rate mortgage (ARM)

Answer 1

A mortgage on which the interest rate rises and falls with changes in prevailing interest rates

Question 2

Affordable housing loan

Answer 2

An umbrella term that covers many slightly different loans that target first-tine home buyers and low-to moderate-income borrowers

Question 3

Blanket mortgage

Answer 3

A mortgage secured by two or more properties

Question 4

Construction loan

Answer 4

Short-term loan for new construction or remodeling of an existing structure

Question 5

Equity sharing

Answer 5

An arrangement whereby a party providing financing gets a portion of the ownership

Question 6

Graduated payment mortgage

Answer 6

A mortgage with an interest rate and maturity that are fixed, but the monthly payment gradually rises, because the initial monthly payments are insufficient to fully amortized the loan

Question 7

Negative amortization

Answer 7

Accrual of interest on a loan balance so that, as loan payments are made, the loan balance rises

Question 8

Option

Answer 8

a right, for a given period of time, to buy, sell, or lease property at specified price and terms

Question 9

Package mortgage

Answer 9

A mortgage that secures personal property in addition to real property

Question 10

RAM

Answer 10

Reverse annuity mortgage