Real Estate Chapter 13 – Property Financing Exam
Questions and Answers
What is an amortized loan?
A loan that is repaid in equal payments over its life
What is a fixed rate mortgage?
A mortgage in which you pay equal fixed rate payments for the duration of the loan.
T/F At the halfway point of a mortgage loan principal and interest portion of the payment will be equal
True
What is a balloon payment loan?
loan is a type of loan that does not fully amortize over its term. Since it is not fully amortized, a balloon
payment is required at the end of the term to repay the remaining principal balance of the loan
What is an adjustable rate mortgage?
A mortgage with an interest that fluctuates up or down (index + margin)
What are periodic caps in mortgage financing?
A tool that limits the amount that ARM can be adjusted during any one interval
, What are lifetime caps?
A tool that limits the amount the interest rate can be increased over the life of the loan
T/F A biweekly mortgage can save interest charges and pay off the loan faster
True
What is a package loan?
A loan which includes personal non-real property with real property
What is a blanket mortgage?
A loan on several pieces of property contains a partial release clause
What is the FHA?
Federal Housing Administration is a lending institution
What are the requirements to obtain an FHA loan?
1. A down payment as low as 3.5%
2. A onetime insurance premium (UFMIP)
T/F For loans made with a low down payment the FHA also charges the borrower an insurance amount
with each payment until the loan to value ratio falls below 78% percent
(MIP)
Questions and Answers
What is an amortized loan?
A loan that is repaid in equal payments over its life
What is a fixed rate mortgage?
A mortgage in which you pay equal fixed rate payments for the duration of the loan.
T/F At the halfway point of a mortgage loan principal and interest portion of the payment will be equal
True
What is a balloon payment loan?
loan is a type of loan that does not fully amortize over its term. Since it is not fully amortized, a balloon
payment is required at the end of the term to repay the remaining principal balance of the loan
What is an adjustable rate mortgage?
A mortgage with an interest that fluctuates up or down (index + margin)
What are periodic caps in mortgage financing?
A tool that limits the amount that ARM can be adjusted during any one interval
, What are lifetime caps?
A tool that limits the amount the interest rate can be increased over the life of the loan
T/F A biweekly mortgage can save interest charges and pay off the loan faster
True
What is a package loan?
A loan which includes personal non-real property with real property
What is a blanket mortgage?
A loan on several pieces of property contains a partial release clause
What is the FHA?
Federal Housing Administration is a lending institution
What are the requirements to obtain an FHA loan?
1. A down payment as low as 3.5%
2. A onetime insurance premium (UFMIP)
T/F For loans made with a low down payment the FHA also charges the borrower an insurance amount
with each payment until the loan to value ratio falls below 78% percent
(MIP)
