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16 Cards in this Set
- Front
- Back
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Amortized Loan |
Payments will go go to both principle and interest. Over time the amount paid to interest decreases until eventually the whole payment goes towards principle |
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Negative Amortization |
A loan that causes the debit to go up over time because payments do not cover interest |
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Graduating Payment Mortgage |
Smaller payment in the beginning of the loan that increases over time. The loan payment in the beginning is not enough to cover the interest. |
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Straight Mortgage |
aka term mortgage aka interest only mortgage, allows the buyer to make a payment in a lump sum at the end of specific term; while paying interest over the years. |
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Adjustable Rate Mortgage |
The payment rate will adjust to the changes in the market. Payments can go up or down. Can cause negative amortization. |
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Fixed Loan |
the rate does not change over time |
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Open ended mortgages |
Allows the home owner to borrow additional funds if the value of their home had increased over the years |
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Reverse Equity Mortgage |
allows seniors to put up their home for a lump sum of money or payments over a period of time. |
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Seller Financing |
The seller is the mortgagee and the buyer is the mortgager. The seller can sell you a house directly and skip the bank. The terms have to be discussed with an attorney. |
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What will banks want to see to qualify for a loan |
In order to qualify for a loan, banks will want to see 20% of the down payment aka asset, the credit score of the borrower, and verify the buyers income (minimum of 2 years of steady income). |
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What will need to be appraised in order to get a loan |
In order to receive a loan the house will need to be appraised. |
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DTI |
Debt to Income Ratio |
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Default |
When a borrower does not make payments |
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Foreclosure |
the banks right to take a home from the borrower when they are in default |
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Lis Pendens |
pending legal action |
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Deed in lieu of foreclosure |
Surrendering the deed to that house without fighting the foreclosure process. |
