Exam (elaborations)
REAL ESTATE FINANCE CHAMPIONS EXAM AND STUDYGUIDE QUESTIONS AND CORRECT DETAILED ANSWERS
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REAL ESTATE FINANCE CHAMPIONS EXAM AND STUDYGUIDE QUESTIONS AND CORRECT DETAILED ANSWERS
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Champions Real Estate FinanceTerms in this set (188)
The percentage of the lesser of the appraised value or
sales price that the lender will lend.
Loan-to-Value Ratio (LTV)
ex: If a borrower is approved for an 80% loan, it means
that the lender will loan up to 80% of the sales price or
appraised value, whichever is lower.
Includes both real and personal property ( fixtures and
Package Mortgage
furnishings)
Blanket Mortgage Covers more than one piece of property.
Method of financing which preserves the low, existing
Wraparound Mortgage
interest rate on the original note.
Permits additional borrowing on the same note. This is
Open-End Mortgage sometimes called a credit card mortgage or a home
equity line of credit - HELOC.
The monthly house payment includes principal, interest,
Budget Mortgage
taxes and insurance (known as PITI)
A hard money loan is a specific type of asset-based
Collateral -Dependent
financing in which a borrower receives funds secured by
Loans
the value of a parcel of real estate.
Is a measure of the willingness of a borrower to make
Character on-time payments. Credit character is revealed in the
borrower's credit report.
Is a measure of the borrower's ability to repay the debt,
Capacity and is demonstrated through current earnings and job
stability.
, Is the sum of all assets that the borrower has
Capital
accumulated.
Is something of value that can be pledged as security for
Collateral
repayment.
Is the return that the investor recieves over the life of the
Yield
loan. (Also known as profit)
The process of creating a new mortgage loan, including
Originator all steps taken by a lender to attract and qualify a
borrower.
Typically functions as a middleman between the
borrower and the lender, negotiating, selling or
Mortgage Broker arranging loans to be delivered to larger investors. At
one time originated up to 80% of all mortgage loans.
(Back on the rise)
Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to
Mortgage Banker
commercial banks/savings associations. (Held, or
"Warehoused")
Usually smaller in scale than mortgage bankers or
Correspondent Lender brokers, these lenders typically extend loans with their
own funds, at their own risk.
Once application is complete the file moves into this
Processing
phase.
The detailed process of evaluating a borrower's loan
Underwriting
application to determine the risk involved for the lender.
The consummation of a real estate transaction in which
Closing all appropriate documents are signed and the proceeds
of the mortgage loan are then disbursed by the lender.
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