Types of Loans in Indiana
How and when does a contractor performing work associated with a 203(k) loan receive funds from the lender?
Half is received up front and the other half after the work is completed and approved
What's a key feature of the Federal Housing Administration's loan program?
Insures lenders against loss from borrower default
Piggyback financing
is a legal way to avoid having to purchase private mortgage insurance
Which of the following ratios are among those acceptable in a piggyback financing arrangement?
80/10/10
How does the FHA control the use of 203(k) money loaned for repairs to a home?
A cost estimate must be provided prior to loan approval, and repairs are approved by an FHA inspector when completed.
growing equity mortgage
A fixed-rate mortgage in which the monthly payments increase over time according to a set schedule
purchase money mortgage
A form of seller financing in which a loan is given to the buyer from the seller; the buyer puts the money toward the purchase price in the form of a down payment
home equity loan
A loan in which the borrower's home equity is used as collateral
blanket loan/mortgage
A loan in which two or more properties are pledged as collateral
fixed-rate loan
A loan where the principal and interest payment remains the same over the life of the loan
adjustable-rate mortgage (ARM)
A mortgage with a rate that adjusts based on changes in a market index
balloon payment
A one-time payment, usually occurring at or near the end of a loan term, which is larger than all the other payment amounts
bridge loan
A temporary loan used to cover the interval between two transactions.
Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?
Acceleration
reverse mortgage
Also known as a home equity conversion mortgage or a reverse annuity mortgage (RAM); allows homeowners to use their home equity to stay in their homes; the lender makes payments to the homeowner for a specified period of time and gains a security interest in the value of the home
home equity line of credit (HELOC)
An open line of credit based on the available equity in the borrower's home
What's a discount point?
An upfront charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires
Which of the following tells the lender how much entitlement the veteran has available under the VA loan program?
Certificate of eligibility
Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?
Defeasance
construction loan/mortgage
Interim financing for developing land. The contract allows for disbursements of funds at specific stages of construction.
Rural Development Loans
Loans for family farms and rural housing; administered by the Farm Service Agency 33 years. 38 years low income.
The interest rate on an FHA Section 251 loan is adjusted based on ______.
Market indices approved by the FHA
What type of foreclosure is commonly used when a deed of trust is the security instrument?
Non-judicial
What often comprises the sum total of a buyer's mortgage payment?
Principal, interest, taxes, and insurance
Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?
Promissory note
mortgage payment has a fixed interest rate, but after the first five years, the rate will adjust annually.
Section 251
The FHA is part of ______.
The Department of Housing and Urban Development
home equity conversion mortgage (HECM)
The lender makes payments to the homeowner for a specified period of time, and gains corresponding ownership
loan-to-value ratio (LTV)
The ratio of a loan amount to the value of the property being purchased
Why might a homebuyer use an FHA 203(k) loan instead of the standard 203(b) loan?
To roll the cost of rehabilitating the purchased home into the mortgage
Which of the following is true about loan assumptions under the VA program?
VA loans are assumable only by other veterans.
reverse annuity mortgage
With a reverse mortgage, the lender makes payments to the homeowner for a specified period of time, and gains corresponding equity.
Affordable Home AH
below market interest rates first time buyer or targeted area purchase income, purchase price, credit score requirements FHA 30 year fixed interest rate IHCDA no down payment assistance
My Home with Mortgage Credit Certificate MH/MCC
combines features of MH program with the federal Mortgage Credit Certificate first time buyers or targeted area purchase income, purchase price, credit score requirements Conventional 30 year fixed interest rate IHCDA no down payment assistance
Next Home NH
down payment assistance - no price restrictions any buyer income and credit score requirements FHA, Conventional 30 year fixed interest IHCDA
helping to own h20
down payment assistance on fha loans first time homebuyer or targeted area purchase purchase price, income and credit score requirements FHA 30 year fixed interest lender
mortgage credit certificate MCC
federal government tax credit program, not a loan program. max annual credit 2000. may be combined with NH or MH programs first time buyer, veteran or targeted area purchase meet purchase price and income requirements FHA, conventional, VA, USDA 30 fixed interest rate lender no down payment assistance
My Home MH
low fixed interest rate any buyer income and credit score requirements Conventional 30 year fixed interest rate IHCDA no down payment assistance
