Chap. 7 & 8 - Financing Programs & Government Loans
Makes higher-interest rate mortgage loans available to those with poor credit. Subprime lenders are not necessarily predatory, but they do make it possible for those with poor credit to obtain a mortgage loan, although at higher-than-market interest rates.
A subprime lender is one who...
$45,000.00 On the 80/15/5 split loan, the first mortgage will be $240,000, the second mortgage $45,000, and a down payment of $15,000.
A couple is purchasing a $300,000.00 home. In order to avoid paying private mortgage insurance, they have opted for 80/15/5 split loan. Their second mortgage will be in the amount of...
Which each monthly mortgage payment on a fully amortized loan, what occurs?
Amount paid for principle increases; amount paid for interest decreases. A fully amortized loan has a series of equal payments with an increasing amount paid for principal, and a decreasing amount paid toward interest.
9.5% The 2/6 cap limits to 6 the increase over the life of the loan: 3 1/2% + 6% = 9 1/2%
An adjustable-rate mortgage based on a LIBOR index of 4%, with a margin of 2%, note rate of 6%, and initial rate of 3.5% with 2/6 caps, could increase to what rate in a five-year period?
RAM (Reverse Annuity Mortgage) the ram would provide the couple with income
An elderly couple has lived in their home for more than 30 years. The husband and the wife are both in their 70's and have experienced extremely large medical bills. They desperately need cash. A feasible solution for them could be...
A lease-purchase Financial negotiations are often entered into before final settlement.
An individual has agreed to buy a farmhouse for $60,000.00. He will pay $500.00 per month rent for one year with a credit back to him of $200.00 per month, payable at time of settlement on the property. The buyer and the seller have executed...
An installment sale The installment sale may provide a tax advantage for he individual.
An individual is selling her home to a young couple. The couple has agreed to pay her $10,000.00 as a down payment. They willalso pay her a total of $6,000.00 per year at 8% interest for 10 years. The couple and the seller have transacted...
22 When the equity reaches 22% of the original value, the PMI must be dropped.
Current legislation requires that private mortgage insurance be automatically dropped when the equity position reaches what percentage of the property's original value?
alternatives for interest only term loans include all of the following options Except -interest only for 5 years, with a balloon payment of all principal due. -interest only for 30 years, with periodic payments toward principal. -interest only for years, with renaming payments adjusted to cover all principal and interest due. -equal payments for 30 years to cover principle and interest.
Equal payments for 30 years to cover principle and interest Equal payments over 30 years would be a fully amortized loan, not interest-only term loan.
In increments called draws The lender disperses funds as the work is completed to protect the lender's interest.
Funds are dispersed on a construction loan...
The cost of the new loan can be recovered in 2 years or less The cost of refinancing should be recoverable in two years
Refinancing is generally worth considering when...
Joint venture Each party brings individual expertise to a specific project
The owner of a 15-acre parcel of land, a local real estate developer, the owner of a construction company, and the president of a savings association are making plans for a few shopping center to be located near the edge of town. They are MOST likely entering into a...
30-yr fixed rate Most people like the security of a fixed0rate loan and the lower monthly payment of a 30 year loan compared to a 15 year loan
Traditionally, the MOST popular type of mortgage loan is the...
$2,400.00 The equation is $80,000 /12 = $6,666.67 * 36%= $2,400
Using standard Fannie Mae/Freddie Mac qualifying ratios of 28/36, a couple with a combined annual income of $80,000.00 would be allowed what total amount to cover all housing expense plus long-term debt?
Properties exchanged must be of equal value Under IRC Section 1031, equal value is not necessary, but equities in the property must be balanced
Which condition is NOT required in an Internal Revenue Code Section 1031 exchange?
