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27 Cards in this Set
- Front
- Back
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Fully Amortized Loan |
balance is zero at the end of the loan |
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Amortized |
pay back a loan in periodic payments that includes principal and interest. |
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Partially Amortized Loan |
principal and interest do not pay off the entire loan |
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Balloon Mortgage |
Partially Amortized Loan |
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Nonamortized Loan |
periodic interest payments are made to the lender but no part of the payment is applied to the principal balance. |
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Term Mortgage or Straight Mortgage and Construction Loan |
Nonamortized Loan |
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Construction Loan |
borrower receives the money in stages and must secure long term financing to pay off the balance when the construction is complete. |
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Index are tied to the ARM |
is reviewed at the adjustable period and used to compute the new rate |
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ARM Adjustable rate mortgage |
contains a clause that allow the interest to adjust over the loan term. |
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Margin used in ARM |
charged by the lender & added to the index to determine the interest. |
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Rate Cap in an ARM |
Is the maximum that the interest can adjust in any subsequent adjustment periods |
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conventional loans
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real estate loans that are not insured by the FHA or guaranteed by the VA |
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equity
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the market value of a property less the debt against it. |
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impound or reserve account
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an account into which the lender places monthly tax and insurance payments |
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loan origination fee
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the expenses a lender incurs in processing a mortgage loan |
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loan to value ratio
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a percentage reflecting what a lender will lend divided by the sale price or market value of the property what ever is less. |
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maturity
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the end of the life of a loan |
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PITI payment
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a loan payment that combines principal, interest, taxes, and insurance
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PMI
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private mortgage insurance; private mortgage insurance sources to insure lenders against foreclosures loss |
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point
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one percent of the loan amount
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UFMIP
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up front mortgage insurance premium- one time charge by the FHA for insuring a loan
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amortization table
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a table that shows the monthly payments required to completely pay off a loan
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balloon loan
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any loan in which the final payment is larger then the preceding payments
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budget mortgage |
a mortgage wherein the borrower pays principal, interest, taxes, and insurance in the same payment
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discount points
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a charge by the lender that will allow them to sell the loan in the secondary market at a discount
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funding fee |
a charge by the VA to guarantee a loan
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loan balance table
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shows the principal still owning during the life of the loan
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