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Questions and Answers
A blanket mortgage includes a clause that allows the property owner to pay off a portion of the mortgage indebtedness, thereby freeing a portion of the property. What is this clause known as?
A blanket mortgage includes a clause that allows the property owner to pay off a portion of the mortgage indebtedness, thereby freeing a portion of the property. What is this clause known as?
- Alienation Clause
- Acceleration Clause
- Buydown
- Release Clause (correct)
What is the specific term for the payment a mortgagor makes to cover mortgage insurance?
What is the specific term for the payment a mortgagor makes to cover mortgage insurance?
- Mortgage Payment
- Mortgage Insurance Premium (correct)
- Insurance Points
- Discount
What is the term for the legal procedure to transfer a right or contract from one person to another?
What is the term for the legal procedure to transfer a right or contract from one person to another?
- Foreclosure
- Trade
- Alienation
- Assignment (correct)
Which fixed amortization term length will result in the lowest monthly payment, assuming all other factors are constant?
Which fixed amortization term length will result in the lowest monthly payment, assuming all other factors are constant?
A seller provides financing to a buyer by extending a junior mortgage that encompasses the existing mortgage. What is this arrangement called?
A seller provides financing to a buyer by extending a junior mortgage that encompasses the existing mortgage. What is this arrangement called?
For which group of homebuyers are FHA mortgages primarily designed?
For which group of homebuyers are FHA mortgages primarily designed?
What type of mortgage loan is specifically designed to offer long-term financing to eligible American veterans?
What type of mortgage loan is specifically designed to offer long-term financing to eligible American veterans?
Which of the following loans are insured or guaranteed by a government agency?
Which of the following loans are insured or guaranteed by a government agency?
Which type of mortgage is commonly used to finance the development of subdivisions?
Which type of mortgage is commonly used to finance the development of subdivisions?
Mortgage brokers, mortgage bankers, credit unions, and banks operate in which market regarding loans?
Mortgage brokers, mortgage bankers, credit unions, and banks operate in which market regarding loans?
What is the minimum down payment typically required for an FHA mortgage?
What is the minimum down payment typically required for an FHA mortgage?
What is the term for a transaction where one sells an asset and then leases it back for the long-term?
What is the term for a transaction where one sells an asset and then leases it back for the long-term?
In what type of mortgage do both the lenders and property dwellers have joint ownership of the real estate?
In what type of mortgage do both the lenders and property dwellers have joint ownership of the real estate?
If the 5-year Treasury rate is 2.5% and the bank's margin is 2.75%, what is the adjusted interest rate?
If the 5-year Treasury rate is 2.5% and the bank's margin is 2.75%, what is the adjusted interest rate?
David is reviewing his mortgage documents. Which of the following clauses is he most likely to find?
David is reviewing his mortgage documents. Which of the following clauses is he most likely to find?
Kristen has defaulted on her mortgage payments. Which clause in Kristen's mortgage will allow the bank to foreclose on the property?
Kristen has defaulted on her mortgage payments. Which clause in Kristen's mortgage will allow the bank to foreclose on the property?
Andrew is obtaining a mortgage. The property is appraised at $540,000, and the contract price is $532,000. If the bank lends at a 75% LTV, what is the maximum mortgage amount Andrew will receive?
Andrew is obtaining a mortgage. The property is appraised at $540,000, and the contract price is $532,000. If the bank lends at a 75% LTV, what is the maximum mortgage amount Andrew will receive?
In addition to PITI (Principal, Interest, Taxes, and Insurance), which of the following is typically included in a mortgage payment made on a condominium?
In addition to PITI (Principal, Interest, Taxes, and Insurance), which of the following is typically included in a mortgage payment made on a condominium?
Which of the following is typically calculated into a monthly mortgage payment?
Which of the following is typically calculated into a monthly mortgage payment?
A lender determines the loan amount based on the Loan-to-Value (LTV) ratio applied to which property value?
A lender determines the loan amount based on the Loan-to-Value (LTV) ratio applied to which property value?
When using comparable sales approach, what parameters do appraisers most commonly apply?
When using comparable sales approach, what parameters do appraisers most commonly apply?
For buyers intending to live in a house long-term, which type of mortgage is generally recommended?
For buyers intending to live in a house long-term, which type of mortgage is generally recommended?
What is the term for claiming a rate of interest on a loan that is higher than what is legally permitted?
What is the term for claiming a rate of interest on a loan that is higher than what is legally permitted?
Kevin wants a mortgage with the lowest possible monthly payment. What mortgage term should Kevin select?
Kevin wants a mortgage with the lowest possible monthly payment. What mortgage term should Kevin select?
What is the term for the practice of paying off a mortgage loan faster than required by the mortgage agreement?
What is the term for the practice of paying off a mortgage loan faster than required by the mortgage agreement?
In 1974, a consumer protection statue was first passed. This statue is known as what?
In 1974, a consumer protection statue was first passed. This statue is known as what?
What is the term for a loan fee equal to one percent of the mortgage amount?
What is the term for a loan fee equal to one percent of the mortgage amount?
If Kevin wants to get an adjustable rate mortgage on his new home, what adjustable rate mortgage will have the highest starting rate?
If Kevin wants to get an adjustable rate mortgage on his new home, what adjustable rate mortgage will have the highest starting rate?
Which clause found in a mortgage ensures that the borrower will maintain clear title on the property if the bank is forced to foreclose?
Which clause found in a mortgage ensures that the borrower will maintain clear title on the property if the bank is forced to foreclose?
Which of the following clauses is least likely to be found in a mortgagor's mortgage documents?
Which of the following clauses is least likely to be found in a mortgagor's mortgage documents?
A non-amortizing mortgage where the principal is repaid in its full amount when the loan reaches the maturity date is also known as what?
A non-amortizing mortgage where the principal is repaid in its full amount when the loan reaches the maturity date is also known as what?
What is the term used to describe the maximum amount of interest an adjustable-rate mortgage can increase over the start rate?
What is the term used to describe the maximum amount of interest an adjustable-rate mortgage can increase over the start rate?
A bank has which of the following rights when lending money to a home buyer?
A bank has which of the following rights when lending money to a home buyer?
What is the term for reductions of income subject to tax, especially expenses incurred to produce income?
What is the term for reductions of income subject to tax, especially expenses incurred to produce income?
Which of the following documents gets recorded in the public record?
Which of the following documents gets recorded in the public record?
A bank is willing to provide a loan with an LTV of 80%. The property's appraised value is $225,000, but the contract price is $230,000. What is the maximum loan amount?
A bank is willing to provide a loan with an LTV of 80%. The property's appraised value is $225,000, but the contract price is $230,000. What is the maximum loan amount?
The loan payment for any period is less than the interest charged over that period. This causes the outstanding balance of the loan to increase. What is this called?
The loan payment for any period is less than the interest charged over that period. This causes the outstanding balance of the loan to increase. What is this called?
What is it called when you lower the interest rate by paying additional points to the lender?
What is it called when you lower the interest rate by paying additional points to the lender?
How is a home equity line of credit typically offered?
How is a home equity line of credit typically offered?
Which of the following adjustable rate mortgages will have a starting interest rate closest to a 30 year fixed mortgage?
Which of the following adjustable rate mortgages will have a starting interest rate closest to a 30 year fixed mortgage?
What is the primary difference between an FHA mortgage and a VA mortgage regarding government involvement?
What is the primary difference between an FHA mortgage and a VA mortgage regarding government involvement?
What is the name of the mortgage program that assists first-time home buyers in New York State?
What is the name of the mortgage program that assists first-time home buyers in New York State?
What is the name of a borrower?
What is the name of a borrower?
In addition to PITI, what other costs are included in a cooperative mortgage payment?
In addition to PITI, what other costs are included in a cooperative mortgage payment?
A bank can allow payments to be made after the due date, without penalty. What is this grace period?
A bank can allow payments to be made after the due date, without penalty. What is this grace period?
What is the market called where borrowers and mortgage originators come together to negotiate and effect real estate transactions called?
What is the market called where borrowers and mortgage originators come together to negotiate and effect real estate transactions called?
A signed document containing a written promise to pay a stated amount to a specific person is known as what?
A signed document containing a written promise to pay a stated amount to a specific person is known as what?
What is another term for a straight mortgage?
What is another term for a straight mortgage?
Which type of loan is an example of a short-term loan?
Which type of loan is an example of a short-term loan?
Flashcards
Release Clause
Release Clause
Allows paying off part of a blanket mortgage, freeing a portion of the property.
Mortgage Insurance Premium
Mortgage Insurance Premium
The amount a mortgagor pays for insurance.
Assignment
Assignment
Transfer of rights/contracts from one person to another.
30-year fixed rate
30-year fixed rate
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Wrap-around Mortgage
Wrap-around Mortgage
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FHA Mortgages
FHA Mortgages
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VA Mortgage
VA Mortgage
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FHA, VA, and FmHA loans
FHA, VA, and FmHA loans
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Blanket Mortgage
Blanket Mortgage
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Primary Mortgage Market
Primary Mortgage Market
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3.5% for FHA mortgage
3.5% for FHA mortgage
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Sale-and-Leaseback
Sale-and-Leaseback
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Shared Equity Mortgage
Shared Equity Mortgage
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Acceleration clause
Acceleration clause
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Maximum Mortgage Amount
Maximum Mortgage Amount
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Common Charges
Common Charges
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Appraised value or contract price, whichever is less.
Appraised value or contract price, whichever is less.
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Properties comparison approach
Properties comparison approach
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Fixed rate
Fixed rate
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Usury
Usury
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30 Year Fixed
30 Year Fixed
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Acceleration Clause
Acceleration Clause
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RESPA
RESPA
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Point
Point
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10/1 ARM
10/1 ARM
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Marketable title clause
Marketable title clause
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Warranty clause
Warranty clause
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Straight Mortgage
Straight Mortgage
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Life cap
Life cap
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Foreclose, assign, take possession.
Foreclose, assign, take possession.
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Interest and tax deductibility
Interest and tax deductibility
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Mortgage
Mortgage
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Negative Amortization
Negative Amortization
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Buydown
Buydown
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Interest only
Interest only
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10/1 ARM
10/1 ARM
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FHA vs. VA Mortgage
FHA vs. VA Mortgage
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Promissory Note
Promissory Note
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Straight Mortgage
Straight Mortgage
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Study Notes
- A release clause in a blanket mortgage allows the property owner to pay off a portion of the mortgage indebtedness, freeing a portion of the property from the mortgage.
- Mortgage insurance premium refers to the amount paid by a mortgagor for mortgage insurance
- Assignment refers to the method by which a right or contract is transferred from one person to another.
- A 30-year fixed amortization term will result in the lowest monthly payment because the loan amount is paid off over a longer period.
- A wrap-around mortgage involves the seller extending a junior mortgage to the buyer, wrapping around the existing mortgage.
- FHA mortgages are best suited for first-time homebuyers due to the low down payment requirements.
- VA mortgages are designed to offer long-term financing to eligible American veterans.
- FmHA loans, VA loans and FHA loans are insured or guaranteed by a government agency.
- Blanket mortgages are often used to finance subdivisions as the loan covers more than one property.
- Mortgage brokers, mortgage bankers, credit unions, and banks operate in the primary mortgage market.
- The minimum down payment for an FHA mortgage is 3.5%.
- In a sale-and-leaseback transaction, one sells an asset and leases it back for the long term.
- A shared equity mortgage exists when real estate is jointly owned by both lenders and property dwellers.
- To find the adjusted interest rate, add the base treasury rate to the bank's margin.
- An alienation clause is commonly found in a mortgage document.
- An acceleration clause allows the bank to accelerate the full payment of the loan through the foreclosure process if the borrower defaults.
- The maximum mortgage amount is calculated by multiplying the loan-to-value (LTV) ratio by the lesser of the appraised value or contract price.
- Common charges, in addition to PITI, are included in a mortgage payment made on a condominium.
- The adjusted interest rate is calculated by adding the base treasury rate to the bank's margin.
- Principal, interest, taxes, and insurance (PITI) and PMI are included in a monthly mortgage payment.
- A lender determines the loan amount by applying the LTV to the lesser of the contract or appraisal price.
- Appraisers typically use properties within a 1 mile radius, sold within the past 6 months, to determine a property's value using the sales comparison approach.
- Fixed rate mortgages are recommended for buyers seeking to live in their house for a long period of time.
- Usury refers to claiming a rate of interest on a loan that is greater than the legal limit.
- A 30 year fixed mortgage term allows for the lowest monthly mortgage payment.
- Acceleration clause involves paying off a mortgage loan faster than required.
- RESPA is a consumer protection statute first passed in 1974.
- A point is defined as a loan fee equal to one percent of the mortgage amount.
- A 10/1 ARM will have the highest starting interest rate, the longer the fixed interest rate period, the higher the interest rate.
- A marketable title clause ensures that the borrower will maintain a clear title to the property even if the bank forecloses.
- A warranty clause will not be encountered in a mortgage document.
- A straight mortgage is a non-amortizing mortgage where the principal is paid in its entirety at maturity.
- A life cap determines the maximum amount of interest an adjustable rate mortgage can increase over the start rate
- The bank has the right to foreclose if the borrower defaults and assign the mortgage to another lender.
- Interest and tax deductibility refers to tax reductions for various items, like expenses, to produce income.
- A mortgage is recorded in the public record.
- To calculate the maximum loan amount, multiply the LTV by the lesser of the appraised value or contract price.
- Negative amortization occurs when the loan payment is less than the interest, increasing the loan balance.
- A buydown involves obtaining a lower interest rate by paying additional points to the lender.
- A home equity line of credit is typically offered as interest-only.
- Adjustable rate mortgages; 10/1 ARM will have a starting interest rate closest to a 30 year fixed mortgage.
- The government insures FHA loans and guarantees VA loans.
- SONYMA assists first-time homebuyers with purchasing a home in New York State.
- Mortgagor is typically a homeowner who issues the mortgage.
- Maintenance payments; in addition to PITI, are included in a mortgage payment made on a cooperative.
- Fifteen days is the typical grace period that banks allow for mortgage payments after the due date.
- The primary mortgage market is where borrowers and mortgage originators negotiate terms and complete mortgage transactions.
- A promissory note is a signed document containing a written promise to pay a stated sum to a specified person/institution at a specified date.
- A straight mortgage is also known as a term mortgage.
- Bridge loans are also known as short-term loans.
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Description
An overview of different mortgage types, including blanket, wrap-around, FHA, and VA loans. Key terms such as release clauses, mortgage insurance premiums, and assignments are defined. The characteristics of each mortgage type are provided.
