IAAO 102 Course Exam: Latest Updated Solution: Guaranteed A+ Score Guide

Direct Capitalization (Ans- A method of converting an estimate of a single year's income into value in one direct step. Yield capitalization (AnsA method of converting future net benefits into present value where each future net benefit is discounted at a proper yield rate (discount rate). Methods of Financing (Ans- 1. Cash 2. Mortgage 3. Trust Deed 4. Land Contract Types of Mortgages (Ans- 1. First Mortgage 2. Junior Mortgage3. Construction Loan Mortgage 4. Purchase Money Mortgage 5. Open-End Mortgage 6. Package Mortgage 7. Chattel Mortgage First Mortgage (Ans- has the first claim on real estate securing the loan and generally covers the major portion of the property value. Junior Mortgage (Ans- often called a second mortgage, third, and so forth. Frequently used when the borrower requires more financing than the amount in the first mortgage. Construction Loan Mortgage (Ans- A short-term loan made for the purpose of financing new construction. Sources of Financing (Ans- 1. Commercial Banks