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40 Cards in this Set

  • Front
  • Back
mortgage
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
mortgagor
borrower
mortgagee
lender receiving the mortgage
promissory note/bond
provides evidence that a valid debt exists and borrower is personally liable
alienation clause (due-on-sale)
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.
novation
release of the original borrower from liability of an assumption is permitted
prepayment penalty clause
can or cannot payoff loan early without penalty (not FHA or VA clauses)
acceleration clause
enables lender to declare entire balance due immediately if the borrower is in default
defeasance clause
mortgage lien is "defeated" upon full payment (including foreclosures)
arrears
payment includes interest for use of the money during previous month
grace period
allows a specified time frame in which the payment may be made
tax breaks for homeowners
mortgage interest and ad valorem real property tax
equity
Current mrkt value-outstanding mortgage
deficiency judgement
court order stating that the borrower stillowes the lender money after foreclosure
borrowers rights
-possession of property prior to default
-defeat in lien by paying debt in full
-equity of redemption
lender's rights
-possession of property after foreclosure
-foreclosure
-right to assign the mortgage
The siplest real estate transaction is __________.
sale free and clear
(cash sale)
satisfaction of mortgage
(discharge of mortgage)
when mortgage is paid in full
Straight-term mortgage
borrower pays interest only for a term and at end, pays full principal
Adjustable rate mortgage
mortgage rate floats based on the fluctuations of a standard index. a margin is added above the index.
margin
measure of profit (bank makes on deal)
rate caps
celings to limit the annual adjustment and the total adjustment during the lifetim of the loan
payment cap
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.
negative amortization
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
Balloon mortgage
installment payments dont cover principal and interest so final payment is substantially large.
amortized mortgage
Retires the debt in installments.
Pledged account mortgage
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.
graduated payment mortgage (GPM)
monthly payments are lower in early years and increase at intervals until payment amount is sufficient to amortize loan over remaining time. only residential
open-end mortgage
original mortgage provides security for additional funds to be advanced to borrower after the loan balance has been reduced to a specified amount
blanket mortgage
two or more parcels of real estate are pledged as security for payment of mortgage debt. has release clause
release clause
allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced by a specified amount
wraparound mortgage
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.
purchase money mortgage
mortgage given by buyer to the seller to cover part of the purchase price.
swing/intermim/bridge loan
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.
construction mortgage
Loan is based on the value resulting from the appraisal of the property and construction plans & specifications.
shared equity mortgage
(last resort) Lender gets a part of the net income on commercial properties, and part of the profit on residential sales
home equity loan
loan against the equity in a home. usually short term and high interest
reverse annuity mortgage
Usually by older ppl who need income. lender makes payments to borrower for a period. At death, the lender recaptures the amount.
package mortgage
personal property and real property is pledged to secure payments of the mortgage loan
sale and leaseback
buyer buys and leases back to seller. sellers tend to be business owners who need capital from the property but need to keep possession