Texas Real Estate Finance Part 2
1%
1 point is equal to...?
Land Contract
A contract for deed is also known as a...?
Land Contract
A contract used in a sale of real property whereby the seller retains title to the property until all or a prescribed part of the purchase price has been paid.
Wrap-around Mortgage
A financing device whereby a lender assumes payments on existing trust deeds of a borrower and takes from the borrower a junior trust deed with a face value in an amount equal to the amount outstanding on the old trust deeds and the additional amount of money borrowed.
Lien
A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation (ex: judgments, taxes, mortgages, deeds of trust, etc..).
Homeowners insurance
A form of property insurance designed to protect an individual's home against damages to the house itself, or to possessions in the home.
True
A form of property insurance designed to protect an individual's home against damages to the house itself, or to possessions in the home.
Life Estate
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate.
Subordinate
A home equity line of credit is typically ..............to a first mortgage?
Mortgage lien
A legal claim against a mortgaged property, which must be paid when the property is sold.
Judgement Lien
A legal claim on all of the property of a judgment debtor which enables the judgment creditor to have the property sold for payment of the amount of the judgment.
General Lien
A lien on all the property of a debtor.
Specific Lien
A lien that attaches to one specific property only.
Open-End Mortgage
A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage.
Home equity line of credit
A loan in which the lender agrees to lend a maximum amount within an agree period, where the collateral is the borrower's equity in their house.
Construction Loan
A loan made to finance the actual construction or improvement on land. Funds are usually dispersed in increments as the construction progresses.
Non-conforming loan
A loan that does not meet the guidelines of Government Sponsored Enterprises (GSE), such as Fannie Mae or Freddie Mac.
Amortized Loan
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity.
Fixed Interest Rate Loan
A loan where the interest rate does not fluctuate during the term of the loan.
True
A mortgage is a secured note...?
Specific lien
A mortgage lien is an example of a...?
FHA Insured Loan
A mortgage loan in which payments are insured by the Federal Housing Administration.
Adjustable rate mortgage
A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise.
Conventional Loan
A mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed. This type of loan is customarily made by a bank or savings and loan association.
Straight note
A note in which a borrower repays the principal in a lump sum at maturity while interest is paid as authorized by the agent's principal.
Mortgage Insurance Premium
A one-time premium paid at the closing pursuant to the purchase.
Home Affordable Modification Program (HAMP)
A program for modifying a mortgage loan in order for the payment to become within the borrower's ability to pay.
Encumbrance
A right or interest in a property that is used by someone other than the owner.
Easement Appurtenant
A right to use adjoining land of another. easements run with land and transfer to new owners when a property is sold
Easement
A right, privilege or interest limited to a specific purpose which one party has in the land of another.
Blanket Mortgage
A single mortgage which covers more than one piece of real property.
Release Clause
A stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien of the instrument as to a specifically described lot or area shall be removed from the blanket lien on the whole area involved.
Interest only loan
A straight, non-amortizing loan in which the lender receives only interest during the term of the loan and principal is repaid in a lump sum at maturity.
Private Mortgage Insurance (PMI)
A type of mortgage insurance required on conventional loans in which the homebuyer makes a down payment of less than 20% of the purchase price.
Fee simple estate
Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees.
Legal rights
According to lien theory, the lender retains equitable rights to the property, while the borrower retains...?
section 203k
An FHA loan used for the purchase and rehabilitation of an owner-occupied house may be insured by which HUD program...?
Due on Sale Clause
An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property.
Payment cap
An adjustable rate mortgage includes an interest rate cap and/or a...?
Balloon Payment
An installment payment on a promissory note, usually the final one for discharging the debt, which is significantly larger than the other installment payments provided under the terms of the promissory note.
Mortgage
An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation; a procedure for foreclosure in event of default is established by statute.
Credit report, income statement, bank statements
An underwriter will review which of the following...?
Encroachment
An unlawful intrusion onto another's adjacent property by improvements to real property (ex: a swimming pool built across a property line).
Unsecured Debt
Credit card debt is considered...?
Easement by necessity
Exists when a landowner has no access to roads and is landlocked.
3.5%
FHA insured loans require a minimum down payment of...?
a careful review of the loan application
FHA insured loans require which of the following...?
Section 203B, 203k, 251
FHA loans may be insured by which of the following HUD programs...?
3 types of loans
Fixed rate mortgage, interest only mortgage, adjustable rate mortgage
Promissory Note
Following a loan commitment from the lender, the borrower signs a note, promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its payment. The evidence of the debt.
Title 1
Home improvement loans are covered under what HUD title loan program..?
Assumption clause
In order for a buyer to take over a seller's existing loan on the property, the loan must contain a/an...?
Must have served at least 90 consecutive days during wartime
In order to be eligible for a VA loan, the borrower must satisfy which of the following conditions...?
Section 251
Insurance for adjustable rate mortgages are covered under what HUD program...?
Simple interest
Interest computed on the principal amount of a loan only as distinguished from compound interest.
Second Mortgage
Junior financing loans are also referred to as a...?
Ad valorem
Latin for "according to value".
Lease Purchase agreement
Lease with Option to Purchase is also known as a...?
Home Affordable Refinance Program (HARP)
Legislation that allows borrowers with little or no equity in their home to refinance their mortgage with no new or additional mortgage insurance.
4 times
Lenders will generally loan up to ........a Veteran's available entitlement without a down payment?
203b
Mortgage insurance for one to four family homes is covered by which HUD section...?
Leasehold Estate
Non-freehold estate; of limited duration, providing the right of possession and control but not title.
Negative amortization
Occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due.
Graduate Payment Mortgage
Providing for partially deferred payments of principal at start of loan. (There are a variety of plans.) Usually after the first five years of the loan term the principal and interest payment are substantially higher, to make up principal portion of payments lost at the beginning of the loan.
Vendee
Purchaser/Buyer
Easement by Necessity
Right of access to a landlocked parcel
VA loans were created under the...
Servicemen's Readjustment Act
True
Subordinate loans are riskier than first mortgages...?
HUD
The FHA is under the supervision of...?
1-4 family homes
The HUD section 203 insures FHA loans for which of the following...?
True
The HUD section 203k program is NOT available for real estate investors...?
Prepayment Penalty
The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity.
Amortization
The liquidation of a financial obligation on an installment basis; also, recovery over a period of cost or value.
Interest rate
The percentage of a sum of money charged for its use. Rent or charge paid for use of money, expressed as a percentage per month or year of the sum borrowed
Recording information, note of attachment, granting clause
The standard provisions of a mortgage incudes which of the following...?
Assumption of mortgage
The taking of a title to property by a grantee wherein grantee assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property, becoming a co-guarantor for the payment of a mortgage or deed of trust note.
1.75%
The upfront fee for MIP is what percent of the loan amount...?
Deed of Trust
This is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan...?
Package mortgage
This type of loan is used to purchase both real and personal property...?
Manufactured Housing mortgage
This type of loan may is primarily used to purchase mobile homes...?
Conforming Loan
Those loans processed on uniform loan forms according to FNMA/FHLMC guidelines.
Subordinate
To make subject to, junior or inferior to.
Guaranteed
VA loans are .............should the borrower default on their payments?
43%
What is the maximum back-end debt ratio for an FHA insured loan...?
31%
What is the maximum front-end debt ratio for an FHA insured loan...?
31%
What is the maximum housing ratio for HAMP...?
There is no minimum downpayment required
What is the minimum down payment required on a VA loan...?
Stimulate new jobs, stabilize the mortgage market, facilitate the financing of repairs, additions, and sales of existing homes
What is the primary duty of the FHA...?
Certificate of Eligibility
What must be obtained in order to qualify for a VA loan...?
Uniform Residential Loan application
When a borrower applies for a loan, they typically fill out which of the following...?
Certificate of Reasonable Value (CRV)
When applying for a VA loan, the maximum value of the property is established by which of the following...?
MIP
Which of the following is added to PITI...?
Open-end mortgage
Which of the following mortgage types are commonly used in construction financing...?
Any outstanding judgments
Which of the following must be resolved by the borrower before an underwriter can process a loan...?
No party is allowed to work directly with the underwriter
Which of the following parties is allowed to work with a lender's underwriter in an effort to get the borrower approved...?
Single Family, conods, cooperatives
Which of the following properties may be purchased using a VA loan...?
Fee Simple Estate
Which of the following refers to an absolute ownership of real property...?
Federal Housing Administration
Which of the following was created under the National Housing Act of 1934...?
Vendor
seller
Easement in gross
the right to use land for a specific, limited purpose unrelated to any adjacent parcel. Example is a utility company