Basics of Finance 3
Negative amortization is possible with graduated payment and _____ loans. adjustable rate open-end purchase money budget
adjustable rate
A loan in which both principal and interest are paid during the term of the loan is called a(n) _____ loan. term package straight amortized
amortized
A wraparound mortgage can be used with _____ existing loan. an assumable a non-assumable any a conventiona
an assumable
A purchase money loan can be used with what loan priority? third mortgage only first mortgage only any mortgage priority second mortgage only
any mortgage priority
With a term loan, the principal is paid _____. along with the interest in equal monthly payments at the end of the term when the loan is originated
at the end of the term
The final payment on a partially amortized loan is called a(n) _____ payment. principal balloon amortization payoff
balloon
A loan in which more than one property is hypothecated as security for a single loan is called a(n) _____ loan. purchase money open-end blanket package
blanket
A PITI loan is another name for a _____ loan. budget purchase money package blanket
budget
An amortized loan that also includes in each payment an amount to cover taxes and insurance is called a _____ loan. package budget blanket purchase money
budget
A mortgage in which the seller prepays interest on the buyer's behalf is called a _____ loan. variable rate purchase money graduated payment buydown
buydown
With an amortized loan, the amount of the interest in successive payments _____. stays the same increases decreases is zero
decreases
At the time a loan is originated, the owner's equity is equal to the _____. principal balance pay off amount down payment principal
down payment
With an amortized loan, the payments are _____. equal for interest only for principal only unequal
equal
The difference between the market value and the outstanding principal balance on any loans against the property is called the owner's _____. principal equity principal balance value
equity
By the end of the term of an amortized loan, the principal is _____. renewed paid in one payment partially paid fully paid
fully paid
An amortized loan under which the payments are set low originally and gradually increase over the first few years of the loan is called a(n) _____ loan. graduated payment variable rate negotiable rate adjustable rate
graduated payment
Negative amortization is possible with adjustable rate and _____ loans. graduated payment purchase money open-end budget
graduated payment
With an amortized loan, the amount of the principal in successive payments _____. stays the same decreases is zero increases
increases
With an adjustable rate loan, the rate of interest is tied to a(n) _____. margin spread indicator index
index
The money paid for the privilege of using a lender's principal is called _____. interest discount points principal and interest collateral
interest
The maximum amount the interest rate can increase over the life of an adjustable rate loan is called the _____. adjustment limit adjustment cap periodic interest rate cap lifetime cap
lifetime cap
With an adjustable rate loan, the amount added to the index to get the interest rate on the loan is called the _____. differential margin rider discount
margin
When the principal amount on a loan increases during the term of the loan, it is called _____. accrued interest partial amortization amortization negative amortization
negative amortization
A loan under which the borrower can obtain additional money during the term of the loan is called a(n) _____ loan. package open-end blanket purchase money
open-end
The type of loan used often with "home equity loans" is a(n) _____ loan. term blanket open-end purchase money
open-end
A real estate loan which also includes a provision for an installment payment on some article of personal property is called a _____ loan. term blanket purchase money package
package
At the end of the term of a partially amortized loan, the remaining principal is _____. equal to the original loan amount renewed automatically refinanced paid in one payment
paid in one payment
At the end of the term of a straight loan, the principal is _____. paid in one payment already fully paid renewed partially paid
paid in one payment
A clause which allows for removing one or more properties from a blanket loan is called a(n) _____ clause. partial release amortization alienation defeasance
partial release
By the end of the term of a partially amortized loan, the principal is _____. renewed equal to the original amount partially paid fully paid
partially paid
The maximum amount the interest rate on an adjustable rate loan can increase in one adjustment period is called the _____. periodic interest rate cap lifetime cap lifetime limit interest rate limit
periodic interest rate cap
The amount of money borrowed on a loan is called the _____. principal origination fee principal and interest note
principal
The amount of the original loan remaining to be paid at a given point in time is called the _____. owner's equity principal and interest principal balance principal
principal balance
A loan from the seller to the buyer to finance all or part of the purchase price of real property is called a _____ loan. package blanket purchase money buydown
purchase money
When a seller "takes back" a mortgage when financing all or part of the buyer's purchase, the loan used is a _____. term package blanket purchase money
purchase money
When a wraparound mortgage is used, the existing loan _____. remains in effect is paid off is not assumable is subordinated
remains in effect
Reverse annuity loans are frequently used by _____. retirees resort property owners first time home buyers commercial property owners
retirees
A transaction in which the owner sells the property to an investor who then leases the property back to the original owner is called a _____ arrangement. reverse annuity shared equity sale and leaseback purchase money
sale and leaseback
When a buyer uses a wraparound mortgage, the payment on the existing loan is made by the _____. buyer mortgagor seller third party
seller
A loan in which the lender offers the borrower favorable loan terms in exchange for a share of the appreciation from the property when it is sold is called a _____ loan. reverse annuity shared equity buydown sale and leaseback
shared equity
A term loan is also called a(n) _____ loan. straight partially amortized reverse amortized
straight
The period of time over which a loan is repaid is called the _____. principal term duration pay period
term
The type of loan on which only interest is paid during the term of the loan is called a(n) _____ loan. partially amortized term secured amortized
term
Negative amortization results from _____. uneven payments late payments unpaid principal unpaid interest
unpaid interest
