Vocab for MLO Test (All of "A") Flashcards
1003 Form
It’s Fannie Mae’s form number for the Uniform Residential Loan Application (URLA). Freddie Mac refers to this as Form 65. The URLA, 1003, and Form 65 are all the same forms and serve as a mortgage loan application.
1031 Exchange
A 1031 exchange is a real estate investing tool that allows investors to swap out an investment property for another and defer capital gains or losses or capital gains tax that you otherwise would have to pay at the time of sale.
2-1 Buydown
It’s a type of financing that lowers the interest rate on a mortgage for the first two years before it rises to the regular, permanent rate.
4506-C
It’s a type of financing that lowers the interest rate on a mortgage for the first two years before it rises to the regular, permanent rate.
Abstract of Title
A summary giving details of the title deeds and documents that prove an owner’s right to dispose of land, together with any encumbrances that relate to the property.(Includes conveyances, interests, and liens)
Acceleration Clause
A loan agreement that requires the borrower to pay off the loan immediately under certain conditions
Accrued Interest
A loan agreement that requires the borrower to pay off the loan immediately under certain conditions
Acquisition Costs
The original cost of an asset
Adjustable Rate Mortgage (ARM)
A mortgage that does not have a fixed interest rate.
Adjusted Basis
A mortgage that does not have a fixed interest rate.(Capital gain or loss for income tax purposes when the property is sold)
Adjustment Interval
The time between the interest rate change and the monthly payment for an ARM. The interval is usually every one, three or five years depending on the index.
Adjustment Period
The time between the interest rate on an adjustable-rate mortgage (ARM) can reset
Affiliated Business Arrangement (AfBA)
When a person in a position to refer real estate settlement services has an affiliate relationship with, or a direct beneficial ownership interest in. (an entity to which settlement business is referred such as a joint venture title or mortgage entity.)
Agreement of Sale
A legal document that outlines the terms of a real estate transaction (Obligates someone to sell)
Alienation Clause
A contract signed with the lender that states that the borrow must pay the mortgage in full before the borrower can transfer the property to someone else.( Also known as a Due-On-Sale-Clause)