Description
Champions School Of Real Estate Finance Exam 2024 Tested And Verified
A home equity loan available to homeowners over 62 years of age - the lender makes
payments to the borrower based on the equity in the property - the loan comes due upon the
sale of the property or the death of the owner. - Reverse Annuity Mortgage
A loan with an interest rate tied to a readily available index - the rate will be adjusted
periodically causing payment changes. - Adjustable Rate Mortgage (ARM)
The refusal to lend in a particular geographic area - prohibited by the Community
Reinvestment Act. Prohibited by Federal Fair Housing Laws. - Redlining
A home equity line of credit - similar to a credit card but secured by real property. - Openend Loan
A combination of the TILA initial disclosure and the RESPA good faith estimate which must be
provided to a buyer at the time of, or within three business days of loan application. - Loan
Estimate
The private equivalent of FHA insurance. Allowing for high LTV / low down payment
conventional loans. Insures the lender's risk. - PMI
A clause in a mortgage allowing the lender to declare the whole amount of the principal due
and payable in the event of default by the borrower. - Acceleration Clause
A debt at closing as shown on the closing disclosure. - Debit
The percent of the price that the buyer is borrowing. High ratio means low down payment. -
Loan to value ratio (LTV)
A monthly payment amount of principal and interest required to amortize a loan of $1,000
based on the interest rate and the term of the loan - loan amount divided by 1,000 times the
factor equals payment. (LOAN/[1000x]) = payment - Loan Factor
Part equals percent times total. ( A basic formula for real estate math) - P=%xT
5,280 feet - 1 Mile
A loan unable to be sold to Fannie Mae or Freddie Mac (i.e. A sub-prime loan) - NonConforming Loan
VA -Veteran's administration - assists veterans in the purchase of housing by guaranteeing
loans)
Seller's equity - Cash price minus the loan balance
A clause often found in a blanket loan allowing the borrower to obtain partial releases of
specific lots by making required lump sum payments. - Release Clause
One percent of a loan that is a loan processing fee - Origination Point
The repayment or satisfaction of a debt by installment payments of principal and interest on
a regular basis. - Amortization
A law allowing individuals to inspect their credit files, correct errors and attach explanatory
statements. - Fair Credit Reporting Act (FCRA)
A law requiring lenders to meet the needs of the community in which they are chartered to
do business. - Community Reinvestment Act
A clause allowing a lender to move to or take a lower lien position. - Subordination Clause
A loan whose payments start low and rise every year, usually for five years, after which they
level off for the remaining term of the loan - can result in negative amortization. - Graduated
Payment Mortgage (GPM)
An increase in debt due to payments less than the interest owed - can be associated with a
graduated payment mortgage. - Negative Amortization
TIL, REG Z, Regulation Z, or the Consumer Credit Protection Act - a law passed to help
consumers understand the true cost of borrowing money. - Truth in Lending
Buyer's Equity - The down payment amount at closing.
DD 214 -Veteran's discharge papers -provided to demonstrate eligibility for a VA loan.
A loan secured by real property plus personal property. - Package loan
An upfront payment of points used to reduce the borrower's monthly payment - by paying
points at closing a borrower may secure a lower rate on the loan. - Buy Down
A clause outlining the obligations of the original borrower and a new borrower in the event
the loan is assumed. - Assumption Clause
Lender under a mortgage - Mortgagee
The action of pledging real property as security for a debt - Hypothecation
A loan with an investor/lender who collects principal and interest payments and then a
percent of the profits when the property is sold. - Shared Appreciation Loan
Borrower under a mortgage - Mortgagor