Types of Loans in Indiana

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How and when does a contractor performing work associated with a 203(k) loan receive funds from the lender?

Half is received up front and the other half after the work is completed and approved

What's a key feature of the Federal Housing Administration's loan program?

Insures lenders against loss from borrower default

Piggyback financing

is a legal way to avoid having to purchase private mortgage insurance

Which of the following ratios are among those acceptable in a piggyback financing arrangement?

80/10/10

How does the FHA control the use of 203(k) money loaned for repairs to a home?

A cost estimate must be provided prior to loan approval, and repairs are approved by an FHA inspector when completed.

growing equity mortgage

A fixed-rate mortgage in which the monthly payments increase over time according to a set schedule

purchase money mortgage

A form of seller financing in which a loan is given to the buyer from the seller; the buyer puts the money toward the purchase price in the form of a down payment

home equity loan

A loan in which the borrower's home equity is used as collateral

blanket loan/mortgage

A loan in which two or more properties are pledged as collateral

fixed-rate loan

A loan where the principal and interest payment remains the same over the life of the loan

adjustable-rate mortgage (ARM)

A mortgage with a rate that adjusts based on changes in a market index

balloon payment

A one-time payment, usually occurring at or near the end of a loan term, which is larger than all the other payment amounts

bridge loan

A temporary loan used to cover the interval between two transactions.

Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?

Acceleration

reverse mortgage

Also known as a home equity conversion mortgage or a reverse annuity mortgage (RAM); allows homeowners to use their home equity to stay in their homes; the lender makes payments to the homeowner for a specified period of time and gains a security interest in the value of the home

home equity line of credit (HELOC)

An open line of credit based on the available equity in the borrower's home

What's a discount point?

An upfront charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires

Which of the following tells the lender how much entitlement the veteran has available under the VA loan program?

Certificate of eligibility

Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

Defeasance

construction loan/mortgage

Interim financing for developing land. The contract allows for disbursements of funds at specific stages of construction.

Rural Development Loans

Loans for family farms and rural housing; administered by the Farm Service Agency 33 years. 38 years low income.

The interest rate on an FHA Section 251 loan is adjusted based on ______.

Market indices approved by the FHA

What type of foreclosure is commonly used when a deed of trust is the security instrument?

Non-judicial

What often comprises the sum total of a buyer's mortgage payment?

Principal, interest, taxes, and insurance

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Promissory note

mortgage payment has a fixed interest rate, but after the first five years, the rate will adjust annually.

Section 251

The FHA is part of ______.

The Department of Housing and Urban Development

home equity conversion mortgage (HECM)

The lender makes payments to the homeowner for a specified period of time, and gains corresponding ownership

loan-to-value ratio (LTV)

The ratio of a loan amount to the value of the property being purchased

Why might a homebuyer use an FHA 203(k) loan instead of the standard 203(b) loan?

To roll the cost of rehabilitating the purchased home into the mortgage

Which of the following is true about loan assumptions under the VA program?

VA loans are assumable only by other veterans.

reverse annuity mortgage

With a reverse mortgage, the lender makes payments to the homeowner for a specified period of time, and gains corresponding equity.

Affordable Home AH

below market interest rates first time buyer or targeted area purchase income, purchase price, credit score requirements FHA 30 year fixed interest rate IHCDA no down payment assistance

My Home with Mortgage Credit Certificate MH/MCC

combines features of MH program with the federal Mortgage Credit Certificate first time buyers or targeted area purchase income, purchase price, credit score requirements Conventional 30 year fixed interest rate IHCDA no down payment assistance

Next Home NH

down payment assistance - no price restrictions any buyer income and credit score requirements FHA, Conventional 30 year fixed interest IHCDA

helping to own h20

down payment assistance on fha loans first time homebuyer or targeted area purchase purchase price, income and credit score requirements FHA 30 year fixed interest lender

mortgage credit certificate MCC

federal government tax credit program, not a loan program. max annual credit 2000. may be combined with NH or MH programs first time buyer, veteran or targeted area purchase meet purchase price and income requirements FHA, conventional, VA, USDA 30 fixed interest rate lender no down payment assistance

My Home MH

low fixed interest rate any buyer income and credit score requirements Conventional 30 year fixed interest rate IHCDA no down payment assistance


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