Real Estate Finance AYPO Questions With 100% Correct Answers.

Real estate has been estimated to represent approximately - Answer-one-half of the world's total economic wealth. The buyer's ability to finance the property is an important, if not the -------, contingency in most residential transactions, and a significant driver in the entire real estate-based economy. - Answerprimary Texas is a: a. Lien Theory b. Title Theory - Answer-a. Lien Theory Lien Theory - Answer-In lien theory states such as Texas, the security for a mortgage is a lien placed on the property, which is removed once the loan is fully repaid. The title (or other legal instrument documenting the rights and privileges of the holder of the title) is actually held by the buyer/property owner. This makes foreclosure more challenging than when the lender (as in a title theory state) or a third party (as in a deed of trust) hold actual title. In all of these cases, the buyer/property owner holds equitable title to the property. Title Theory - Answer-In title theory states, the mortgage is secured by the lender holding legal title to the property until the mortgage is paid off. Again, the borrower holds "equitable" title to the property which carries many, but not all, of the rights granted by the actual title. The full title is given to the borrower when the loan obligation has been fully satisfied. Because the lender has the full title, foreclosure on the property is easier than if the mortgage was only secured by a lien, because the title does not need to be recovered from the defaulting buyer. Mortgages - Answer-While the loan is the money a lender provides to buy the home, the mortgage and deed of trust are the "instruments" that document the lender's actual interest in the property. Amortization - Answer-paying off of debt with a fixed schedule in regular installments over time, therefore, a fully amortized loan is one that is paid back over the term of the loan (most frequently 15-, 20-, and 30-year periods) through a set number of equal payments. promissory note - Answer-piece of the mortgage loan contract committing the borrower to pay back the loaned money.Second Mortgages - Answer-loan that is secured by a property that is already collateral for another mortgage, generally a first mortgage