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60 Cards in this Set
- Front
- Back
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What does FICO stand for |
Fair Issac Credit Organization |
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When a borrower has credit extended to them but they have not used it. Currently owed on a debt vs the maximum amount that was extended to the borrower by the creditor |
Utilization ratio |
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When is it not discriminatory not to show a house |
When the buyer is not qualified for the price range |
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What does ECOA stand for |
Equal Credit Opportunity Act |
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What is not a part of Fair Housing bit IS a part of ECOA |
Age, marital status, public assistance |
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What are two ratios that are important to the lender when pre qualifying a borrower |
Income ratio Debt ratio |
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What act was passed to prevent discrimination in lending |
ECOA |
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Loans must be based primarily on what |
Credit worthiness |
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Who or what says the Lender must disclose all finance charges as well as the annual percentage rate APR in advance of closing |
Regulation Z (truth in lending) |
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Laws passed by states that limit the interest rates lenders can charge |
Usery. Each state sets their own. |
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Lenders may not charge prepayment penalties on what type of loans |
FHA, or any insured by the federal govt ( VA, Fannie Mae, Freddie Mac) |
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The fee charged for processing the mortgage application |
Origination fee |
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The original amount that is borrowed |
Principle |
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Prepaid interest paid to the lender at closing |
Discount points |
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What does each discount point cost |
1% of the LOAN amount ( will try to trick you and say "purchase amount) |
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Each point reduces the interest rate by what percentage |
1/8% |
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What is the purpose of the prepayment clause |
Recoup anticipated interest |
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A way to temporarily reduce the interest rate is referred to as |
Buydown |
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A secondary market for FHA and VA loans |
Fannie Mae |
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What was established to help maintain a sound credit and economic environment and counteract inflation and deflation trends |
Federal Reserve System |
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Who acts as intermediaries between borrowers and lenders |
Mortgage brokers |
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What is the difference between mortgage bankers and mortgage brokers |
Bankers originate loans, usually funding them with their own money. Brokers do not lend their own money. They get paid a fee for connecting borrowers with lenders. |
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What is Ginnie Mae (GNMA) s main job |
Administer special assistance programs |
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A govt sponsored enterprise that has become a large purchaser of conventional loans |
Freddie Mac (FHLMC) |
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Who is the largest purchaser and handles FHA, VA and conventional loans |
Fannie Mae |
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Who is a govt corporation that guarantees mortgage backed securities market for VA and FHA loans |
Ginnie Mae |
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FHA does not |
Lend money |
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The VA does not lend money, rather they |
Partially guarantee a loan |
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An appraisal on a VA backed loan |
A certificate of reasonable value |
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Mortgage Insurance Premiums (MIP) are used for |
FHA loans |
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Private Mortgage Insurance (PMI) is used for |
Conventional loans |
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Type of loan that is assumable under certain conditions |
VA |
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Federal agency that administers FHA loans |
HUD |
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Type of loan that is guaranteed up to certain limits |
VA |
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Type of loan that is not guaranteed by the federal government |
Conventional |
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Who pays the points on a VA loan |
Buyer or seller |
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In order to get a VA loan what must a buyer have |
DD214 and cert of eligibility |
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Assuming a loan : The buyer makes all the payments but is not personally responsible for the loan |
Subject to |
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Assuming a loan: when the buyer becomes primarily responsible for the loan |
Assumption |
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A clause that requires the borrower to pay off the loan when title transfers |
Alienation |
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Loan in which payments at the beginning are not sufficient to cover the interest expense so it is added to the principle balance |
Graduated payment loan |
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Loan that includes real and personal property (buying the house and all the furniture) |
Package loan |
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Loan that allows the borrower additional funds at a later date |
Open End |
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Loan based on the equity in the home |
HELOC |
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Temporary loan used when building |
Construction loan |
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Type of loan when the borrower knows their income will increase in the future |
Graduated payment loan GPM |
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Loan that has an index, a margin and a cap. The interest rate will adjust over the course of the loan |
ARM |
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Loan that includes PITI |
Budget loan |
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Loan that is paid off in equal payments over the life of the loan and will be zero at maturity |
Amortized |
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The borrower owes the exact amount borrowed at maturity |
Straight loan |
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Borrower makes monthly payments but they are not sufficient to bring the balance to zero at maturity |
Ballon payment loan |
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Loan typically used by sub dividers because it covers more than one lot |
Blanket loan |
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The bank makes annuity payments to elderly borrowers based on the equity in the home |
Reverse mortgage |
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A permanent loan that will pay off a construction loan and possibly a lot loan |
Takeout loan |
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The homeowner provides part of the financing to make the property more attractive |
Purchase money mortgage |
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An existing loan on the property assumed by the lender who then gives the borrower a larger new loan |
Wrap around loan |
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Charging a rate of interest in excess of what is allowed by law |
Usery |
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In AZ what is the usery law |
Whatever is reasonable |
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The difference between the market value of a home and the outstanding loans |
Equity |
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How is interest paid |
In arrears |
