Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
59 Cards in this Set
- Front
- Back
smaller-than-normal payments are required in the early years, but gradually increase to larger-than-normal payments in later years
|
Graduated-payment mortgage
|
|
a base interest rate is set for the loan that is perhaps 0.5 percentage point higher than the interest rate for a conventional mortgage
|
Lender buy-down mortgage
|
|
series of short-term loans for two-to five-year periods, but with total amortization spread over the usual 25 to 30 years
|
Rollover Mortgage
|
|
lender offers an interest rate about one-third less than the market rate
|
shared-appreciation mortgage
|
|
People who design their loan in advance to reduce interest costs by paying off the mortgage loan early
|
Growing-equity mortgage
|
|
the buyer pays the seller a downpayment generally equal to the seller's equity in the home and takes responsibility for the mortgage loan payments for the remaining term of the seller's existing mortgage loan
|
assumable mortgage
|
|
this reuqires that the mortgage loan be fully paid off if the home is sold
|
due-on-sale clause
|
|
dividing the maximum amount the lender will loan on a piece of property by the property's purchase price
|
loan-to-value ratio
|
|
compares the total annual expenditures for housing with the loan applicant's gross annual income
|
front-end ratio
|
|
compares the total of all monthly debt payments with gross monthly income
|
back-end ratio
|
|
A lease is the cost of using an apartment or other housing space.
|
False
|
|
Owners of a condominium pay a homeowner's fee covering expenses related to the management of common grounds and facilities.
|
True
|
|
As a rule of thumb for determining the affordability of housing, the front-end ratio compares total monthly debt repayments (for the mortgage, auto loans, and other debts) with gross monthly income.
|
False
|
|
A mortgage loan is a loan to purchase real estate, in which the real estate itself serves as collateral.
|
True
|
|
Dividing the maximum amount a lender will loan on a piece of property by its value results in its loan-to-value ratio.
|
True
|
|
When a home has a second mortgage, it is the original mortgage that gets paid first in the event of default.
|
True
|
|
A land contract (or contract for deed) is an example of seller financing.
|
True
|
|
Negative amortization is the process of reducing the amount owed on a mortgage loan.
|
False
|
|
a special reserve account at a financial institution where funds are held until they are paid to a third party
|
escrow account
|
|
monthly payments are smaller than necessary to pay the interest
|
negative amortization
|
|
Reverse mortgages are also referred to as home-equity conversion loans.
|
True
|
|
Both home-equity installment loans and home-equity lines of credit are available to those who want to borrow the home equity as collateral.
|
True
|
|
In calculations of real estate property taxes, a home's fair market value and its assessed value are the same.
|
False
|
|
Prospective home buyers can qualify for a lower down payment if they make use of private or governmental mortgage insurance.
|
True
|
|
The factor(s) that make(s) home ownership financially advantageous over renting is (are)
|
Taxes and appreciation
|
|
The concept of gradually paying off a mortgage loan through a series of periodic payments is called
|
amortization
|
|
The formal legal document that outlines the actual agreement that results from real estate negotiations is called a(n)
|
Purchase Contract
|
|
The traditional fixed-rate, fixed-term, fixed-payment mortgage loan is called a
|
Conventional Mortgage
|
|
real estate taxes and homeowners' insurance premiums are often included in a monthly mortgage payment?
|
True
|
|
You can pay off your mortgage loan early and thereby save on total interest costs by using a(n)
|
Growing-Equity Mortgage
|
|
The two types of loans available when using the equity in your home as collateral are referred to as home-equity lines of credit and
|
Home-equity installment loans
|
|
Which of the following increase the return for a mortgage lender?
|
Interest Points
|
|
When you make an offer on a house, you should give a deposit called __________ _______ to the seller to ensure that the seller will not sell the house to someone else while you are negotiating.
|
Earnest Money
|
|
A(n) __________ is the written history of the ownership of real estate.
|
Abstract
|
|
Which of the following is used to convey real estate ownership to another?
|
Deed
|
|
The typical commission rate charged by brokers to list the home for sale and other services is
|
6 percent paid by the seller.
|
|
People who buy cooperative housing actually own a share in the ownership of the cooperative that is equivalent to the value of their particular housing unit and a proportionate share of all common areas.
|
True
|
|
A sales contract for the offer to purchase a home is usually backed by earnest money.
|
True
|
|
From the home buyer's perspective there is no meaningful difference between a listing agent and a selling agent.
|
True
|
|
The loan-to-value ratio for determining a down payment on a mortgage loan is calculated by dividing the maximum amount the lender will loan on a piece of property by its value.
|
True
|
|
The traditional fixed-interest rate, fixed-term, fixed-payment mortgage is referred to as a conventional mortgage.
|
True
|
|
The down payment required to assume a mortgage is roughly equivalent to the seller's equity in the home.
|
True
|
|
Interest-rate caps on an adjustable-rate mortgage place limits on both annual and life-of-loan increases in the mortgage interest rate.
|
True
|
|
Home-equity lines of credit are a form of second mortgage.
|
True
|
|
An escrow account is often used to hold real estate property tax payments and homeowners' insurance payments until the bills are received and paid by the lender.
|
True
|
|
A point is equal to 1 percent of the purchase price of a home.
|
False
|
|
The document outlining the legal right of ownership interest in real estate is called a title.
|
True
|
|
Homes are covered by implied warranties, but buyers may still want to purchase warranty insurance
|
True
|
|
Which of the following types of leases allows for either party to terminate the agreement at any time if they give proper notice (e.g. one week or one month)?
|
Periodic Tenancy
|
|
Which of the following types of owned housing is fully- or partially factory-assembled and designed to be transported in portions to the home site?
|
Manufactured Housing
|
|
A purchase offer on a home is usually accompanied by
|
Earnest Money
|
|
In order to protect themselves from the possibility of being turned down for a mortgage, home buyers should make sure that which of the following is included in the purchase contract?
|
contingency clause
|
|
The dollar value of a home in excess of what is owed on it is the
|
Equity
|
|
Which of the following occurs when the monthly payment on a mortgage loan is not sufficient to pay the interest owed?
|
Negative amortization
|
|
Which of the following types of mortgages allows the owner of a paid for home to live in the home and yet receive periodic payments from borrowing on the equity in the home?
|
Reverse Mortgage
|
|
Real estate property taxes are based on which of the following dollar amounts?
|
assessed value of the property
|
|
Which of the following is a legal opinion (not a guarantee) written by an attorney of the status of ownership of real estate?
|
Certificate of title
|
|
Of the four types of deeds, which is the safest?
|
Warrenty deed
|
|
Which of the following lists all of the fees to be paid at a real estate closing?
|
Uniform Settlement Statement
|