Finance
The seller under a land contract is called the:
vendor Land contracts are also known as installment contracts. In this type of arrangement, thy buyer occupies the property, but the title is held in the name of the seller until some future point in time-- often when the last payment is made
If buyers purchased a home for $142,500 and secured a loan for 100% of the purchase price, which of the following types of loans did they most likely obtain?
VA-guaranteed With a VA Loan, there is often no down payment required while the other types of loans mentioned here would very rarely qualify a loan at 100% of the purchase price. VA loans are guaranteed by the US Department of Veterans Affairs (VA)
When would an appraiser be least concerned about the state's economy?
When appraising a medical building This is because the the availability of money is not directly affected by peoples health. A poor economy would negatively impact the value of residential homes, restaurants and retail stores.
Conventional loans are made from
private sources
Which of the following liens will have first priority?
property tax lien
The act of recovering title to property lost through foreclosure on a mortgage is called:
redemption / right of redemption
Marilyn is applying for a loan to finance her new home in an area where there are minorities. The loan officer tells her that she should try to find another location, since the loan committee would prefer not to land in that area. The lender may be involved in the illegal practice called:
redlining
This is a legally permitted act:
refusing to make a mortgage loan to a minority individual because of poor credit history This is one of those trick questions because bad credit can cause anyone to be rejected, even those who are members of protected classes. Fair housing laws, however, do prohibit altering the terms of a loan for a member of a minority group or advertising property for sale only to a special group, and refusing to rent an available apartment to a family of 6 children is in violation of the Fair Housing Act.
A 70 year old homeowner has owned her house for over 50 years. It has fallen into disrepair, but because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan would BEST provide her the funds to make the necessary repairs?
reverse-mortgage a reverse mortgage allows people 62 years of age or older who have considerable equity in their homes may borrow money against that equity. No payments are due until the property is sold or the borrower defaults (doesn't pay taxes,etc.), moves, or dies. A home equity loan uses the equity in a home as a source of loans but requires monthly payments of principal and interest that may be burdensome to older persons on a fixed monthly income. A blanket mortgage loan covers more than one parcel or lot and permits the borrower to obtain a release of parcel or lot from the mortgage lien when the lot is sold. An open-end mortgage is an expandable loan in which the borrowers are given a limit up to which they may borrower, with each advance secured by the same mortgage.
Which transaction requires a securities license?
selling shares in Fannie Mae; Even though Fannie Mae is a mortgage-based business, its shares sell just like any other stock and only people with a securities license may offer them for sale.
On home loans, the interest which is paid for the use of money borrowed is almost always:
simple interest
The borrower with a construction loan receives the loaned amount in
stages, called draws, during the construction period With a construction loan, the borrower receives money in stages, called draws, and makes periodic payments of interest. At the end of the construction period, the borrower must secure long-term financing to payoff the entire balance of the loan.
The right of borrowers who have defaulted on a loan to redeem their property after the sale of a foreclosure for a certain period of time established by law called a(n):
statutory right of redemption certain states have a period of time AFTER a foreclosure sale in which the borrower in default may redeem the property if the borrower pays the court - this right is called a statutory right of redemption. If a borrower in default pays the lender the amount in default plus costs BEFORE the foreclosure sale, some states have an equitable right of redemption that allows the loan to be reinstated
A mortgage clause which states that, should the borrower sell the property, the entire balance of her mortgage would be due immediately, is known as:
the due-on-sale clause The due-on-sale clause is also known as an alienation clause or resale clause, and says that the balance must be paid in full if the property is sold. Don't confuse this term with an acceleration clause, which makes the whole debt is paid in full on a mortgage; or an estoppel certificate, which is not a clause at all but a document mortgage.
Conventional loans are viewed as the MOST secure loans because:
their LTV ratios are often lower than other types of loans the borrower with a conventional loan usually makes a down payment of at least 20%, so that the LTV is 80%. the security for the loan is provided by the mortgage, and the payment of debt rests on the borrower's ability to pay. conventional loans are not insured or guaranteed by the government, unlike FHA or VA loans. PMI protects the lender only for the excess of the loan amount over 80% of the property's appraised value. conventional loans are often purchases from the original lenders through the secondary mortgage market.
When Jones purchased Brown's property on an installment sale, he assumed an existing loan that exceeded Brown's basis in the property. The amount of the assumed loan over Brown's basis will be:
treated as part of the down payment, whether cash was received or not. In an installment sale, the amount of an assumed loan which exceeds the seller's cost basis is treated as part of the down payment ans is taxable in the year of the sale.
What does the term "Quiet enjoyment and possession" mean?
A tenant has the right to enjoy his property without disturbance from those with Paramount title.
When the deed in which you take title to a property contains the following clause "subject to the existing loan":
"Buying subject to" means buying a home subject to the existing mortgage. It means the seller is not paying off the existing mortgage and the buyer is taking over the payments. The unpaid balance of the existing mortgage is then calculated as part of the buyer's purchase price, but the seller remains responsible for paying off the existing loan because it's still in their name.
A note on which only the interest is paid during its term is called:
A straight note In a straight note there are no principal payments made. The entire principal amount of the loan is paid off at the maturity of its term.
If a borrower must pay $6,000 for points on a $150,000 loan, how many points is the lender charging for this loan?
6000 / 150000 - .04 = 4% = 4 points
A mortgage that covers more than one parcel of real property would be which kind of mortgage?
A blanket mortgage Blanket loans are popular with builders and developers who buy large tracts of land, then subdivide hem to create many individual parcels to be gradually sold one at a time (release clause).
Which type of loan will result in the largest reduction of the principal balance most quickly? A. 13% over 15 years B. 10% over 30 years C. 11% over 20 years D. 14% over 20 years
A. 13% over 15 years The shorter the term of the loan, the more quickly principal is paid down and the faster equity builds. A 15-year loan at 13% interest rate would provide the largest & fastest reduction in the principal. Interestingly, the payments on a 15-year loan are often not that much higher than the same loan with a 30-year payback. However, there are other considerations and options borrowers should understand.
A standard for expressing true annual cost of borrowing is expressed as the:
APR - Annual percentage rate Expresses the true cost of the loan by factoring fees such as points, recording fees, appraisal fees and such into the interest rate. For example, a mortgage that showed an interest rate of 4.85% on the promissory note might have an APR of 5% when associated costs are factored in.
The provision in a mortgage or deed of trust that gives the lender the right to call the entire balance due upon a default in any payment is called a(n):
Acceleration Clause; An acceleration clause in a loan contract allows the lender to call the entire unpaid balance of a loan due immediately upon default of the loan. The presence of an acceleration clause in such a contract does not limit the negotiability of the note.
A purchaser is qualified to obtain an FHA loan for his new home. Which of the following would he apply to?
An FHA lender; The FHA does not negotiate loans. The FHA insures loans, which means the loan is backed by the government. Loans are through an FHA-approved lending institution. Fannie Mae does not lend money directly to home buyers but purchases mortgages in the secondary market. Freddie Mac is a federally chartered corporation that purchases mortgages in the secondary market.
If each of the following loans would otherwise require compliance with the Federal Truth-in-Lending Act, which one would be exempt based on the type of loan itself?
An agricultural loan by a bank TILA was designed to protect borrowers by requiring lenders to make meaningful disclosures of credit terms to borrowers. TILA does not cover agricultural loans, but does cover home loans, home improvement loans, home equity loans, signature loans and credit cards.
Under the Federal Truth-in-Lending Law, the cost of credit on certain loans is expressed as:
An annual percentage rate; The APR us the cost of credit that consumers pay, expressed as a simple annual percentage. If the ad only states the APR, then other disclosures are not necessary.
Value placed upon property for property tax purposes by the tax assessor is known as:
Assessed Value An assessed value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation determines the value of residence for tax purposes and takes comparable home sales and inspections into consideration.
A borrower takes out a mortgage loan that requires monthly payments of $875.70 for 20 years, and a final payment of $24,095. This is what type of loan?
Balloon A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, leaving a balance due at maturity. The final payment is called a balloon payment because of its large size. Balloon payment mortgages are more common in commercial real estate than in residential.
A builder wants to offer financial assistance to prospective buyers but does not want to lower the price of the homes. Instead the builder agrees to pay a lump sum in cash to the lender at closing so that the buyers will enjoy a lower interest rate. What type of loan is this?
Buydown
"Let the buyer beware" is also known as what?
Caveat Emptor; the principle that only the buyer is responsible for checking the quality and suitability of goods prior to making a purchase. In real estate, this often means the buyer purchases a property as-is, without warranties of title or of condition of the property.
The recording of an instrument gives:
Constructive notice constructive notice attaches once a document is recorded. Once recorded, subsequent buyers will be deemed to have received "Constructive Notice" regarding the document and its effect on the property in question. Actual Notice is when an individual has first-hand knowledge of something. (For example, if a buyer has taken possession of the property that is for sale).
A "GPAM" mortgage loan provides for:
Deferment of certain payments on the principal during the early period of the loan; Graduated Payment Adjustable Mortgage (GPAM/ GPM), is a mortgage with low initial monthly payments which gradually increase over a specified time frame. These plans are mostly geared towards young people who cannot afford large payments now, but can realistically expect to raise their incomes in the future. For instance a medical student who is just about to finish medical school might not have the financial capability to pay for a mortgage loan, but once he graduates, it is more that probable that he will be earning a high income. It is a form of negative amortization loan.
Lenders know that the lower the LTV ratio, the higher the:
Equity; LTV is a ratio of the percentage of the appraised value of a property that the lender will loan. The lower the ratio, the higher the equity. An LTV ratio is an assessment of lending risk that financial institutions and other lenders examine before approving a mortgage. Loans with high LTV ratios are higher risk so, if the mortgage is approved, the loan will generally cost the borrower more. Sometimes, a loan with a high LTV ratio may require the borrower to purchase mortgage insurance to offset the risk to the lender.
Who is the recipient of the mortgage insurance payment on an FHA insured loan?
FHA; An FHA loan is a mortgage that's insured by the Federal Housing Administration (FHA). Borrowers still pay mortgage insurance premiums, but directly to the FHA, which usually requires an upfront premium based on the loan amount, and a separate monthly premium that is added to a borrower's overall monthly payment.
Who enforces the Truth-in-Lending Act?
Federal Trade Commission; The FTC is an independent agency of the US government, established in 1914 by the Federal Trade Commissions Act. Its principal mission is the promotion of consumer protection and the elimination and prevention of anti-competitive business practices, such as coercive monopoly. It enforces over 70 laws, including TILA. The FTC shares this authority with the Consumer Financial Protection Bureau (which could also be a correct andwer.
It would be to the advantage of lending institutions to waive prepayment penalties when which of the following is occuring?
Funds are in short and the demand for loans is high. This incentivizes early mortgage payoff, which creates an inflow of funds that can be loaned back out
"The measure of goods and services produced by the nation during any one calendar year" is called:
Gross National Product - GNP (gross domestic product)
In a fully amortized loan:
Interest may be paid in arrears, at the end of each period for which it is earned. In fully amortized loans, interest is usually paid in arrears, although a lender may require that it be paid in advance (at the beginning of the period for which it is earned). The lender credits each payment first to the interest due, then to the principal amount. The portion applied to repayment of the principal grows, and the interest due declines as the unpaid balance of the loan is reduced.
Which of the following statements concerning typical land sale contracts is correct?
Land sale contracts are the lease secure method of financing for the buyer because the seller retains the title and the buyer is merely the equitable owner. A land contract is a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owner, or seller, until the purchase price is paid in full.
The Real Estate Settlement Procedures Act (RESPA) applies to which of the following activities?
Licensed lenders when preparing home loans RESPA was enacted by Congress to provide homebuyers and sellers with improved disclosures of settlement costs and to eliminate abusive practices in real estate settlement process. It applies to holders of Mortgage Broker Licenses and Mortgage Lender Licenses.
What is the difference between MIP and PMI?
MIP (mortgage insurance premium) is charged on FHA loans, PMI (private mortgage insurance) applies to some conventional mortgages
On an FHA loan, what is the borrower not required to do?
Make a 20% down payment on the loan An FHA loan is a mortgage that is insured by the Federal Housing Administration (FHA)... However, borrowers must pay mortgage insurance premiums, which protects the lender if a borrower defaults. Borrowers can qualify for an FHA loan with a down payment as little as 3.5% for a credit score of 580 or higher.
The applicant for a mortgage may NOT be asked about his or her: A. Source of income used for repayments B. National Origin C. Number and ages of dependents D. Immigration status
National Origin National origin is one of the protected classes under the Equal Credit Opportunity Act. Mortgage interviewers are allowed to ask about the other items.
When the required payments on a real estate loan are insufficient to pay the interest due, the result is:
Negative amortization
Tax credits are a direct offset against taxes due rather than deductions against income. Credits are usually available for all the following types of real estate except:
New ventures running at a loss Tax credits are an incentive offered by jurisdictions to encourage special efforts to improve the quality of life in a community through restoring abandoned buildings and providing shelter for the needy.
An owner advertised "beautiful acreage; only $5,000 down; owner will personally finance down payment." Would this be in violation of TILA?
No, owners are not covered by Regulation Z Regulation Z (TILA) requires disclosure of all financing terms or other enticement is featured in an ad. The requirement doesn't apply in this case because Regulation Z applies only to institutions- not individuals selling their own property.
Pledging a freestanding stove and refrigerator as security for a loan in addition to real property is an example of what kind of mortgage?
Package mortgage
APR is defined by TILA as:
Relative cost of credit expressed in percentage terms When APR is used in advertising by a lender it reveals the particularities of costs in credit in percentage terms. (If the ad only states the APR, then other disclosures are not necessary).
RESPA applies to which activity?
Savings and loan institutions lending money for home loans to first time buyers. RESPA was enacted by Congress to provide homebuyers and sellers with improved disclosures of settlement costs and to eliminate abusive practices in the real estate settlement process. It applies to most federally-related or federally-backed home loans.
In a repayment of a mortgage loan, which type of interest is issued?
Simple Simple interest is interest payable on the principal of a loan only. Compound interest is associated with savings accounts and reflects the fact that interest earned on principal is added to the principal periodically, and interest is re-calculated based on the new principal. "Floating" and "Discount" are terms associated with the bank-to-bank transactions and financial markets
An owner of a trailer park wants to sell his business and real estate so that he may retire, but on the tax on the capital gain would be prohibitive. One alternative that would allow the owner to make a change in lifestyle while avoiding payment of capital gain tax is to:
Structure a like-kind exchange involving a similar property. A Section 1031 exchange, known as a like-kind exchange, allows the owner to trade the property for a similar one. This is only applicable to investment property and is not effective in the purchase of foreign real estate
Three business days before the closing of a real estate loan transaction, a mortgage loan originator must provide the borrower with the Closing Disclosure (CD). This disclosure is in keeping with which of the following?
TILA/RESPA; TILA is the Truth-in-Lending Act and RESPA is the Real Estate Settlement Procedures Act. The consumer Financial Protection Bureau (CFPB) modified both rules in its TRID final ruling, which consolidates several disclosures into a single Loan Estimate at the beginning of the home-buying process and a Closing Disclosure provided towards the end of the process.
According to TILA (Regulation Z) this disclosure statement for a borrower must include which of the following?
The annual percentage rate, late payment charge, and the total dollar amount that will be repaid over the life of the loan.
Fee for services means
The consumer only pays for services actually used fee for services is a piecemeal arrangement where consumer, not just a FSBO, decides which services are needed and works with and pays the broker solely for those services. This arrangement is unlike discounted real estate where the consumer receives all of the real estate services for a discounted price. All real estate professionals must be careful with this type of service that meets the required minimum duties as set forth by the license law.
Which of the following statements is correct concerning the relationship between an effective interest rate and nominal interest rate?
The effective interest rate is the rate actually paid by the borrower for the use of the money; the nominal interest rate is the rate specified in the note
A lender's title insurance policy terminates when which of the following occurs?
The mortgage debt is paid in full; Title insurance is insurance against loss resulting from defects of title to a specifically described parcel of real property. Most title insurance policies are to cover the lender and the policy terminates when the mortgage deft is paid in full. Owner's Title Insurance policies exist as well, to cover the owner in defects in the title.
What does not directly affect the level and movement of mortgage interest rates?
The rate of unemployment Unemployment DOES NOT directly affect the level and movement of interest rates, although it can indirectly have an effect. The inflation rate and the supply and demand of money all directly affect the market, which directly affects interest rates.
Which of the following is most accurate concerning mortgage bankers?
They negotiate loans which are suitable in the secondary mortgage market
What is the court order called which directs the sheriff to sell real property to satisfy a judgement?
Writ of execution A writ of execution is a court order to put in force a judgement or possession obtained by a plaintiff from a court. When issuing a writ of execution, a court typically will order a sheriff or other similar official to take possession of property owned bu a judgement debtor.
When the amortized payment of a mortgage remains constant over the period of the loan, but leaves an outstanding balance to be paid at the end, this payment is called:
a balloon payment Typically, mortgages with balloon payments are used as a creative financing tool in which buyers plan to refinance the balance in three to five years with better terms than they can qualify for now.
A characteristic of a partially amortized loan is:
a balloon payment exists at the end of the loan; A partially amortized loan is a special type of liability or obligation that involves partial amortization during the long-term and a balloon payment (lump sum) on the loan maturity date.
A loan fee is charged by a lender to increase the lender's yield on a loan is:
a discount point discount points are used to increase the lender's yield on its investment. The yield is the profit the lender makes on a loan, the spread between the cost of acquiring the funds lent to the borrower. Interest is the sum paid or accrued in return for the use of a lender's money. The principal is the balance owed on the original loan amount.
A loan on real estate must have:
a loan for real property must be in writing to be valid
A Purchase Money Mortgage is:
a mortgage given from buyer to seller to secure the purchase price
When a mortgage loan has been paid in full, it is important for the borrower to be sure that:
a satisfaction of mortgage is recorded Recording formalizes the owners "paid in full status. Without this step, it's not uncommon for the lenders interest to remain listed which creates complications if the owner wishes to sell or obtain new financing
The terms of some real estate loans provide that the interest rate may be increased or decreased depending on money market conditions. We call this type of loan:
a variable interest rate loan
The clause in a trust deed or mortgage which permits the mortgagee to declare the entire unpaid sum due upon default by the mortgagor is called:
an acceleration clause "Acceleration clauses" are stipulations that if certain events occur, such as not making payments, the entire amount of the mortgage can become due. Most typically, this is seen in "Due on Sale" clauses hat require them mortgage balance be paid in full at the time the house is sold
A clause may be inserted into a lease allowing rent to increase based upon a formula. This is known as:
an escalation clause Many commercial leases will include a rent escalation clause, allowing the landlord to increase rent based on a specific trigger or a specific timeline. Some examples are: Stepped Increase Escalation (rent increases by $X per year per sq. ft); Tax Pass-Through Escalation (rent increases if property tax increases); Indexed Escalation (rent varies based on inflation).
A buyer wants to take out an FHA loan. The broker should refer the borrower directly to:
any approved lending institution such as a bank or savings and loan association
The "Open End" clause in mortgage would benefit the borrower the most if he:
borrowed additional money Open-End clause is provision in mortgage contract that declares the mortgaged real estate may be used as security to borrower additional money.
Which of the following is tax deductible for homeowners? A. interest paid on mortgages B. pest control C. addition of a pool D. utility payments
interest paid on mortages
The Federal National Mortgage Association (FNMA) was created under Title-II for the National Housing Act and is primarily for the purpose of:
buying Title-II loans to keep the market liquid The Federal National Mortgage Association (FNMA) was created under Title-II for the National Housing Act ans is primarily for the purpose of buying Title-II loans to keep the market liquid.
When an eligible veteran is negotiating to purchase a home with a VA-guaranteed loan, as part of the loan process the VA will issue
certificate of reasonable value (CRV) The VA will issue a CRV on a VA-approved appraisal of the property. The URAR is a standardized form used by licensed and certified appraisers to produce an opinion of value on residential property
A loan made with real estate as security and not involving government participation in the form of insuring, guaranteeing, or direct lending is known as a
conventional loan
Mortgages which are not insured by a government agency are called:
conventional mortgages A conventional loan is a mortgage not backed by any Government agency such as the Federal Housing Administration (FHA) or Veterans Administration (VA). Conventional loans often meet the lending requirements of Fannie Mae and Freddie Mac, the 2 largest buyers of mortgage loans in the US.
An accounting term used to designate payment of owing is called:
debit
In some states, the instrument used instead of a mortgage is a:
deed of trust a deed of trust differs from a mortgage in that it simplifies the process of foreclosure in case of default.
Which of the following clauses in a conventional mortgage instrument entitles the lender to accelerate the loan if the loan is assumed?
due-on-sale a due-on-sale clause states that the entire balance would be due upon sale of the property. Thus if there is a due on sale clause there will be no loan to assume.
In a fixed-rate, fully amortized loan:
each mortgage payment is the same A fully amortized loan is paid off slowly, overtime, in equal payments. Regular periodic payments are made over a term of years. In a partially amortized loan, such as balloon mortgage, the principal and interest payments do not pay off the entire loan. A loan balance remains when the final payment is made. In the fully-amortized loan. the lender credits each payment first to the interest due, then to the principal amount of the loan. As a result, while each payment remains the same, the portion applied to repayment of the principal grows and the interest due declines as the unpaid balance of the loan is reduced.
The difference between the value of a property and the total amount of liens against it is known as:
equity equity is the difference between how much a property is worth and how much is owed on the property of another to satisfy unpaid debt.
The "secondary mortgage market: refers to the market where:
existing loans are bought and sold
A purchaser cannot qualify for conventional financing and negotiates a contract for deed with a seller. The buyer in this arrangement
has possession and pays property expenses and taxes. In a contract for deed arrangement, the buyer takes full possession of the property. The buyer agrees to pay real property taxes, insurance premiums, and for the upkeep of the property. The seller is not obligated to deliver the deed for the property to the buyer until all the terms of the contract have been satisfied.
When compared with a 30-year payment period, taking out a loan with a 20-year payment results in:
higher monthly payments
If an individual gives his property as security for debt, but does not give up possession, he has:
hypothecated the property
If equal monthly payments are made when financing a home with a long-term loan, the amount of each payment applied to the outstanding principal balance will:
increase while the interest payment decreases on a level payment loan, the amount of each payment applied to interest decreases, while the amount of each payment applied to principal increases. This is because the amount of each loan payment stays the same but the amount that needs to be paid off is reduced with each payment As a simplified example, lets say you had a $100 loan with 5% interest calculated on each payment of $20. Your first $20 payment would show $5 paid to interest (5% of $100 = $5) and $15 to the principal. Your next payment would be on a principal of $85 since you just paid the principal down by $15. 5% of $85 = $4.25, so your next $20 payment would show $4.25 paid to interest and $15.75 paid to principal. The amount each payment that goes towards interest goes down, and the amount of each payment that goes towards principal goes up.
Discount points are considered:
interest rate equalization factors Mortgage points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called "buying down the rate," which can lower your monthly mortgage payments. One point costs 1% of your mortgage amount. (or $1,000 for every $100,000).
A promissory note:
is the primary evidence of debt When a borrower signs a promissory note, he or she acknowledges the debt and all its terms and conditions. It is the primary instrument in virtually every type of loan
What is not a characteristic of a conventional loan?
it is never insured by a private agency A conventional mortgage is a home loan that isn'y guaranteed or insured by the federal government, so they are generally insured by private agencies. Conventional mortgages conform to the requirements set forth by Fannie Mae and Freddie Mac typically require down payments of at least 3%.
Which of the following is true of a second mortgage? A. it has priority over a first mortgage B. is cannot be used as a security instrument C. it is usually issued at a higher rate of interest D. it is not negotiable
it is usually issued at a higher rate of interest second mortgages carry higher risk for lenders because they're "second" in line after the first mortgage holder. In case of foreclosure, that means the first mortgage holder is paid in full before any remaining monies are distributed. This added exposure typically results in higher interest rates
Life insurance company mortgage holdings are greatest in:
large commercial and apartment loans; Life insurance companies have mortgage holdings in their investment portfolios, and they tend to have the greatest holdings in large commercial and apartment loans.
The CFPB (Consumer Financial Protection Bureau) requires that:
lenders provide the borrower with a new loan estimate at the time of application or no more than 2 days after application The law requires full disclosure of APR and terms in certain items are included in the advertisement, it does not apply to all ads. The law does not apply to the purchase of commercial properties. CFPB does not require brokers to verify the new loan closing disclosure matches a new loan estimate as there my have been changes.
The discount points charged by a lender on a federal VA or FHA loan are a percentage of the:
loan amount; Like points, discount points are one-time charges equal to one percent of the loan amount for each point charged.
In making new real estate loans, institutional lenders often charge a fee for expenses incurred for such items as document preparation and related work. The fee charged is often a percentage of the face amount of the loan. and is referred to on the borrower's closing statement as:
loan origination fee
A recorded subdivision plat is used in the:
lot and block system; The rectangular survey system divides land into rectangles and describes those rectangles with principal meridians and base lines. The geodetic survey system refers to the government system that identifies one property through a network of benchmarks, each one identified by its longitude and latitude. The metes-and-bounds system outlines the perimeter of a parcel by starting at one point and ending at the same point.
The most significant requirement of a so-called "tax-free exchange" is that the properties be: A. equal equities B. of a like kind C. residential D. of equal value
of a like kind IRC section 1031 provides an exception and allows you to postpose paying tax on the fain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but is not tax-free.
The most significant requirement of a so-called "tax-free exchange" is that the properties be:
of a like kind IRS Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred, but it is not tax-free.
A fixed-rate home loan that is fully amortized according to the original payment payment schedule
permits the borrower to pay the same amount each payment period A fully amortized loan is a level-payment loan, with the same amount being paid by the borrower each payment period (usually monthly). The loan can be sold in the secondary market. An adjustable-rate mortgage has an interest rate that fluctuates based on economic index.
With certain restrictions, the federal tax laws permit deductions for mortgage interest on which of the following property types?
primary residences, second homes, and residential rental properties. How much can be deducted for rental properties depends on how much time per month the property is rented out.
Which lender is the major source for junior loans negotiated today?
private lenders a junior loan is a subordinate loan to a primary mortgage that uses the same home as collateral
A lender's interest in a mortgage loan with high LTV ratio is protected by obtaining additional security from: A. private mortgage insurance B. impound accounts C. title insurance D. the borrower's note
private mortgage insurance Loans over an 80% LTV are more risky and will typically require PMI. With PMI, the borrower purchases an insurance policy that provides the lender with funds in the event that the borrower defaults on the loan. Title insurance protects a lender or buyer from defects in the chain of title. The borrower's note is a promise to repay the loan. Impound accounts hold buyers' funds for property insurance and taxes which the lender pays on behalf of the buyer
A lender's interest in a mortgage loan with high LTV ratio is protected by obtaining additional security from:
private mortgage insurance; Loans over 80% LTV are more risky and will typically require PMI. With PMI, the borrower purchases the insurance policy that provides the lender with funds in the event that the borrower defaults on the loan. Title insurance protects a lender or a buyer from defects in the chain of title. The borrower's note is a promise to repay the loan. Impound accounts hold buyers' funds for property insurance and taxes which the lender pays on behalf of the buyer.
Wen comparing a straight note with an installment note, the straight note:
will have no principal payments during the term of the loan on except on the last payment In a straight Note there are no principal payments made. The entire principal; amount of the loan is paid off at maturity with a balloon payment or the principal can be refinanced. The interest is paid off either at the end or during the note's term.
