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22 Cards in this Set
- Front
- Back
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Term Loan or
Straight Loan |
no interest
usually will have ballon payment (final payment principal & interest) |
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Fully Amortimized
fixed, flat, level, constant payment |
equal payment paid monthly.
payment lower the principal |
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Partially Amortimized Loan
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schedule of amortimized payments, followed by a ballon payment at maturity.
i.e. 10 years |
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Loan To Value (LTV)
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What a lender is willing to lend according to precentage of appraised market value
i.e. 80% of 100,000 would be 80,000 |
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Usary
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the limit of amount of interest that can be charged
N/A in all states Va. doesn't have this law |
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Yield
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The return on a loan or the amount of profit that lender makes, stated as a percentage of the amount interest rate loaned.
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Mortgage
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voluntary lien on real estate, given to secure a debt on the repayment of a obligation(mortage)
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Lien Theory
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Some states see a mortgage as being purely a lien on real property. The mortgagee(lender) thus has no right of possession but must foreclose the property if the mortgagor(borrower) defaults
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Title Theory
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States split the title of mortgaged property into legal title, held by the (morgagee) lender, and equitable title, held by the (mortgagor) borrower. The borrower gains full title to the property after paying the mortgage Contrast with lien theory states
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Promissory Note (note)
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is a contract between a borrower(obligator), and a lender (obligee)
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Promissory Note has 5 parts
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To be valid
1 must be in writing 2 be between borrower & lender who have authority to sign 3 state promise of how much to pay 4 show terms of payment 5 be signed by the borrower(principal) 6 be voluntarily delivered |
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Co-Borrowers
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both personally liable for debt.
each are jointly and severally liable, and not just a portion but the whole debt. |
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Exculpatory Clause
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put in a mortgage when a lend holds property as security for debt.
REGAGRDLESS OF LENDER WOULD GET AT FORECLOSER SALE THEY MUST ACCEPT IT |
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Hypothecation
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means borrower holds possession of property while paying debt. (property is collateral for debt)
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Mortgagor / Obligator
Mortgagee / Obligee |
Mortgagor / Obligator
is buyer Mortgagee / Obligee is lender |
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Defeasance Clause
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lender must cancel mortgage after paid.
also called defeat the debt giving borrower full rights |
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Alienation Clause or due-on-sale clause
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lender has right to entire balance if title is transfered
1 can approve the party who will assume loan 2 can demand balance paid immeadiately |
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Condemnation Clause
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if property condemned the lender gets paid first
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Subordination Clause
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Lender allows a newer mortgage to be 1st, and take 2nd order (as long as there is another mortgage.
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Subordination Agreement
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Lender allows a future mortgage to go ahead
usuall found in purchase-money mortgage(owner finacing)i.e. constrution loan for a developer |
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Covenant to Pay Indebtedness
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borrower promises to pay amount owed according to terms
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Covenant to Pay Taxes
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borrower promises to pay taxes & assessment in timely manner
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