Real Estate

Front 1

mortgage

Back 1

loan that constitutes a lien against the real property...it pledges a property as security for repayment of a loan under certain terms and conditions

Front 2

mortgagor

Back 2

borrower

Front 3

mortgagee

Back 3

lender receiving the mortgage

Front 4

promissory note/bond

Back 4

provides evidence that a valid debt exists and borrower is personally liable

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alienation clause (due-on-sale)

Back 5

entitles lender to declare the principal balance immediately due and payable if the borrower sells the property during the mortgage term and makes the mortgage assumable w/o the lender's permission.

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novation

Back 6

release of the original borrower from liability of an assumption is permitted

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prepayment penalty clause

Back 7

can or cannot payoff loan early without penalty (not FHA or VA clauses)

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acceleration clause

Back 8

enables lender to declare entire balance due immediately if the borrower is in default

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defeasance clause

Back 9

mortgage lien is "defeated" upon full payment (including foreclosures)

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arrears

Back 10

payment includes interest for use of the money during previous month

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grace period

Back 11

allows a specified time frame in which the payment may be made

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tax breaks for homeowners

Back 12

mortgage interest and ad valorem real property tax

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equity

Back 13

Current mrkt value-outstanding mortgage

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deficiency judgement

Back 14

court order stating that the borrower stillowes the lender money after foreclosure

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borrowers rights

Back 15

-possession of property prior to default
-defeat in lien by paying debt in full
-equity of redemption

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lender's rights

Back 16

-possession of property after foreclosure
-foreclosure
-right to assign the mortgage

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The siplest real estate transaction is __________.

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sale free and clear
(cash sale)

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satisfaction of mortgage
(discharge of mortgage)

Back 18

when mortgage is paid in full

Front 19

Straight-term mortgage

Back 19

borrower pays interest only for a term and at end, pays full principal

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Adjustable rate mortgage

Back 20

mortgage rate floats based on the fluctuations of a standard index. a margin is added above the index.

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margin

Back 21

measure of profit (bank makes on deal)

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rate caps

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celings to limit the annual adjustment and the total adjustment during the lifetim of the loan

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payment cap

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if interest rate increases, lender allows a cap, in which the monthly payment remains the same and the money for the higher interest rate is added to the principal.

Front 24

negative amortization

Back 24

balance of principal increases (usually lower rates). Index rises while payment is fixed so money goes to interest. What isnt covered is added back to principal, increasing it

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Balloon mortgage

Back 25

installment payments dont cover principal and interest so final payment is substantially large.

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amortized mortgage

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Retires the debt in installments.

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Pledged account mortgage

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downpayment is placed in an account. escalating payments are made and withdrawals are made as well until account depleted. The remaining balance onloan is amortized.

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graduated payment mortgage (GPM)

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monthly payments are lower in early years and increase at intervals until payment amount is sufficient to amortize loan over remaining time. only residential

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open-end mortgage

Back 29

original mortgage provides security for additional funds to be advanced to borrower after the loan balance has been reduced to a specified amount

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blanket mortgage

Back 30

two or more parcels of real estate are pledged as security for payment of mortgage debt. has release clause

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release clause

Back 31

allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced by a specified amount

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wraparound mortgage

Back 32

seller financing. It wraps around loan to buyer, who takes title to the property subject to the existing first mortgage. The seller continues to make the paymetns on first mortgage and buyer makes payments to wrap around.

Front 33

purchase money mortgage

Back 33

mortgage given by buyer to the seller to cover part of the purchase price.

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swing/intermim/bridge loan

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usually not secured by a mortgage. Using equity in one property to buy another. When property borrowed against is sold, the money from the sale is used to pay back the loan.

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construction mortgage

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Loan is based on the value resulting from the appraisal of the property and construction plans & specifications.

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shared equity mortgage

Back 36

(last resort) Lender gets a part of the net income on commercial properties, and part of the profit on residential sales

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home equity loan

Back 37

loan against the equity in a home. usually short term and high interest

Front 38

reverse annuity mortgage

Back 38

Usually by older ppl who need income. lender makes payments to borrower for a period. At death, the lender recaptures the amount.

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package mortgage

Back 39

personal property and real property is pledged to secure payments of the mortgage loan

Front 40

sale and leaseback

Back 40

buyer buys and leases back to seller. sellers tend to be business owners who need capital from the property but need to keep possession