Section 9
Calvin purchased a house for $220,000, financing $200,000 using a 30-year conventional mortgage at 4% interest. His monthly payment is $955, including both principal and interest. The annual property taxes are $1,400 and the combined annual insurance premium is $900. What's Calvin's PITI payment each month?
$1,146.67
An annual insurance premium is $500. What's the monthly insurance payment?
$41.67
In calculating PITI for a mortgage payment, the annual taxes and insurance are divided by ______ and are added to the monthly principal and interest payment to make up the total monthly payment.
12
John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to close on a new property?
180
Approximately how many states have predatory lending laws?
36
To which of the following borrowers might a lender be most likely to recommend an FHA loan?
A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores
Barb is considering a refinance. She wants to stick with a conventional loan. Why might she be wary of an introductory rate?
After an initial low rate, her payments may increase beyond the level of affordability.
In 2001, California legislators enacted the ______ to combat predatory lending practices.
Covered Loan Law
The ______ restricts refinancing when the new loan has no identifiable benefit to the borrower.
Covered Loan Law
John sells his single-family home and purchases a new home for his family to reside in. Marcus owns a single-family home, but rents it out to a co-worker while he is on an extended two-year military tour overseas. Donald sells an apartment complex and purchases a new complex in a different part of the city. Which of these consumers is most likely to take advantage of a 1031 tax-deferred exchange?
Donald
To whom would a 1031 tax exchange usually appeal?
Investors
The acronym PITI is a reference to what real estate-related concept?
Mortgage payment
What type of partnership is a real estate mortgage investment conduit?
Partnership between mortgagees
What's the purpose of PMI?
Protect the lender in case of borrower default when the borrower has put down less than 20%
Which of these acts has special provisions for borrowers who are victims of over-charging?
Real Estate Settlement Procedures Act
A RAM is a type of equity financing. What does RAM stand for?
Reverse annuity mortgage
What is the 200% rule as it relates to tax-deferred exchanges?
The combined fair market value of the property (or properties) being exchanged into cannot be more than 200% of the relinquished property.
What's true about the draw period on a home equity line of credit (HELOC)?
The draw period varies.
With an interest-only loan, what happens after the specific period of time that interest-only payments are made is over?
The full principal of the loan is due. With an interest-only payment, the periodic payments of interest only last for a few years. When the loan term is over, the borrower has to repay the entire principal. This is known as a lump sum payment. This lump sum payment is usually accomplished through refinancing the loan.
What's one reason a borrower may choose a piggyback (or split) loan?
To avoid paying private mortgage insurance