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30 Cards in this Set

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Any secrity instrument that olds first lien position; it has the highest lien priority.
First Mortgage
Any mortgage that has a higher lien position than another.
Senior Mortgage
A mortgage that is second to a first mortgage, but senior to a third.
Junior Mortgage
Sometimes means any mortgage loan used to finance the purchase of the property that is collateral for the loan: where buyer gives the lender a mortgage on the same property to secure the loan. Seller can be the lender. Aka soft money mortgage.
Purchase Money Mortgage
The monthly payment includes not just principal and interest on the loan, but one-twelfth of the year's property taxes and hazard insurance premiums as well.
Safest and most practical way to assure lenders that taxes aind insurance premiums are paid on time.
Budget Mortgage
When personal property is included in the sale of real estate and financed along with the real estate with one loan.
Package Mortgage
A temporary loan used to finance the construction of improvements on the land. When construction is complete the loan is replaced by a permanent financing called Take-out loan.
Construction Loan
A series of predetermined disbursements, called obligatory advancems, at various stages of construction. Interest begines to accrue with the first disbursement.
Fixed Disbursement Plan
When a borrower mortgages several pieces of property as security for one loan. Example: A ten-acre parcel subdivided into twenty lots might be used to secure one loan made to the subdivider.
Blanket Mortgage
A provision requring the lender to release certain parcesl from a blanket lien when specified portions of the overall debt have been paid off.
Partial Release Clause

Usually part of a Blanket Mortgage.
This mortgage allows the lener to participate in the earnings generated by the mortgaged property, usually in addtion to collecting interest payments on the principal.

In some cases the lender participates by becoming a part-owner of the property.
Most common on large commercial projcts where the lender is an insurance company or other large invstor.
Participation Mortgage
With this mortgage, the lender is entitled to a specified share of the increase in the property's value.
Shared Appreciation Mortgage
A morgage that includeds an existing first mortgage on the property. generally used only in seller-financed transactions.
Wraparound Mortgage
Why should a Wraparound Mortgage have an alienation clause?
Without an alienation clause the lender could require the seller to pay off the underlying loan at the time of sale.
This mortgage has a set borrowing limit, but allows the borrower to reborrow any part of the debt that has been repaid without having to negotiate a new mortgage.
Open-end Mortgage
Allows the borrower to make asmaller payments at first and gradually step up to larger payments.
Graduated Payment Mortgage
This mortgage is used when a buyers are ready to purchase a new home before they've succeeded in selling thier current home.
Swing Loan
Designed to provide income to older homeowners where the owner borrows against the home's equity bt will receive a monthly chck from the lender rather than making monthly payments.
Reverse Equity Mortgage
This type of loan can benefit borrowers who expect thier earnings to increase during the next few years.
Graduated Payment Mortgage
With this loan a lender will often hold back 10% or more of the loan proceeds until the period for claiming liens has expired, to protect against unpaid liens that could affect the marketability of the property.
Construction Loan
This loan is used when buyers need funds for thier downpayment and closing cost right away, without waiting for the proceeds from the eventual sale of the current home.
Swing loan
To obtain this loan a borrower must be over a certain age (for example, 62 or 65) and must own the home with little or no outstanding mortgage balance.
The home usually must be sold when the owner dies in order to pay back the mortgage.
Reverse Equity Mortgage.
The interest rate on this type of loan is usually a variable rate that rises and falls with market interest rates.
Open-end Mortgage
A Swing Mortgage can als be called:
A Gap or Bridge Loan
Payments increase annually for the first three to five years and then level out for the rest of the loan term.
Graduated Payment Mortgage
When a Construction Loan is replaced by permanent financing.
A Take-out Loan
A buyer bought ovens, freezers, and other equipment along with a restarant building, the purchase might be financed with a...
Package Mortgage
Usually secured by equity in the buyers current property that they are tyring to sell, and it will be paid off when the sale closes.
Swing Loan
A mortgage that a buyer gives to a seller in a seller-financed transaction. Instead of paying the full price in cash t closing, the buyer gives the seller a mortgage on the property and pays the price off in installments.
Purchase Money Mortgage
This type of loan is often used as a business tool by builders and farmers.
Open-end Mortgage