finance 3

what does PITI stand for

Principal, Interest, Taxes, Insurance first payments go towards interest

FHA 203(b)

The most popular FHA mortgage plan, with 3.5% or less as required down payment. -used for single family residences

conventional loan

a loan that is neither federally insured nor guaranteed - a private sector loan

Lenders who ______ can underwrite and approve FHA loans without requiring the FHA to review each borrower's qualifications.

participate in the direct endorsement program

In which type of partnership do participants have shared responsibility for a single mortgage?

partnership between mortgagors

What type of partnership is a real estate mortgage investment conduit?

partnership of mortgagees

What is the purpose of the Uniform Residential Appraisal Report?

provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property.

What factors directly affect an adjustable rate mortgage?

rate, index, margin

Annual MIP can be removed from an FHA loan by ______.

refinancing to a conventional loan

When a veteran assumes a VA loan, the ______ agreement can restore the original buyer's level of entitlement as if the loan were repaid in full.

substitution of entitlemetn

The upfront MIP on an FHA loan is calculated on ______.

the base loan amount

what is calculated as a part of the annual MIP

-amount of loan -loan to value ratio -loan duration recalculated each year

good neighbor next door program services who

-k-12 teachers -firefighters -emts

It's possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.

3- 10 years

What's the most common ratio for borrowers who use split, or piggyback, mortgages?

80/10/10

Remy's mortgage payment is $1,256.28. His annual property taxes are $809, and his annual insurance premium is $712. How much of his payment goes toward the principal and interest?

809+712= 1521/12 = 126.75 1256.28-126.75 = 1129.53

Reverse Annuity Mortgage

A home equity loan available to homeowners over 62 years of age- the lender makes payments to the borrower based on the equity in their property- the loan comes due upon the sale of the property or death of the owner

amortized loan

A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.

governmental loan

A loan made by a conventional lender with a government guarantee or insurance

remainderman

A person who inherits or is entitled to inherit property upon the termination of the estate of the former owner.

deed of trust

Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party)

FHA 203k Loan

Can be an initial loan to purchase a home or for home improvements. Purchase a home for major repairs.

CRV

Certificate of Reasonable Value -shelf life of 6 months for resale properties -12 months for new construction

Cheyenne is selling the family farm via an installment contract. What is one advantage of selling the farm this way?

Cheyenne will pay less in capital gains taxes by receiving the proceeds from the sale over time, rather than in a lump sum.

On an FHA 203(k) loan, the combined cost of home value and rehab must ______.

Fall within the FHA mortgage limit for the area where the property is located.

explain a partnership among mortgagees

In which type of partnership does each mortgagee receive a share of the mortgage payment?

who are the parties in a mortgage

Mortgagee: Lender Mortgagor: Borrower

Veterans Housing Assistance Program (VHAP)

This program allows a Texas veteran to buy a home in Texas with low interest and little or no down payment. The maximum amount of the home loan is $417,000. The loan is originated by a participating lender. The veteran must occupy the home within 60 days after the closing of the loan and must use the home as their primary residence for the next three years.

conforming loan

a standardized conventional loan written on uniform documents that meets the purchase requirements of Fannie Mae and Freddie Mac - both loan amount and borrower characteristics must meet the guidelines

FHA Streamline Refinance

allows borrowers who already have an FHA loan to refinance allows an unlimited loan to value ratio

What is the three-property rule as it relates to tax-deferred exchanges?

an investor can identify up to three replacement properties and not encounter a restriction regarding fair market value as long as debt load requirement is met

smaller special housing adaptation grant

can be used to adapt a home owned by a family member where the eligible veteran lives

Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. Which of the following statements is true?

closing costs are not considered a seller concession

John uses the VA home loan to purchase property. His mortgage is $200,000. Then, two years later, John defaults on his loan. How much will the VA reimburse the lender?

covers 1/4 of the loan 50,000

explain a partnership among mortgagors

designed for several mortgagors to share responsibility for a multifamily structure ex: apartment building

With a VA loan, the certificate of reasonable value is used to ______.

determine the value of the loan that the VA will guarantee

FHA Section 251 Adjustable Rate Mortgages

fixed rate term between 3-10 years interest rate is adjusted annually based on market indices approved by the FHA

what are the underwriting requirements for an FHA loan

housing ratio of no more than 31% a total debt obligation that does not exceed 43% minimun credit score of 500

equitable title

interest acquired by buyer with land contract

What is another name for an installment sale contract?

land contract

what is a requirement of a 1031

must be like-kind

do they qualify for an FHA loan? Wilma has a pretty good credit score of 650. Her housing ratio is 35%, and her total debt obligation is 41%.

no

Good Neighbor Next Door Program

offers a discount of 50% from the list price of a home to law enforcement officers, pre-Kindergarten through 12th grade teachers, and firefighters/emergency medical technicians. In return, the buyer must commit to live in the property for 36 months as his or her sole residence.

When a buyer uses an FHA loan, the down payment amount is calculated ______.

on the lesser of the sales price or the appraised value of the property

Which of the following is a true statement about borrower qualification standards for a VA-guaranteed loan?

the applicant must have a certificate of eligibility

the FHA is apart of

the federal housing and ubran development

explain the partnership between mortgagees and mortgagors

the financier become a partner in the project ex: exchange for a lower interest rate or other concession to the mortgagor

Which of the following statements about the VA guaranteed home loan program is true?

the service members length of service, duty status, and character of service determine eligibility

What is the 95% rule as it relates to tax-deferred exchanges?

the total value of the property (or properties) being exchanged is at least 95% of the value of the property being sold

The funding fee on a VA loan is waived when ______.

the veteran has a 10% or higher VA disability

What's one reason a borrower would choose a split—or piggyback—loan option?

to avoid going over the conforming loan limit

VA specially adapted housing grant

to remodel a home he owns to accommodate his disability

do they qualify for an FHA loan? Gretchen is a single mom with three kids. Her credit score is 620, her housing ratio is 31%, and her total debt obligations come to 40%.

yes