Basics of Finance 3

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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


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