ANSWERS|LATEST !!!!2026|GRADED A+| (EXAM
Straight note - ANSWER promissory note principal do in one lump sum at the end of
the loan term
Installment note - ANSWER promissory note with specific principal and interest
Principle of Leverage - ANSWER business tool to earn profit like a landlord with rent
FICO - ANSWER most commonly used credit rating system
Negative amortization - ANSWER payment is less than interest amount owing
increases
Equity - ANSWER market value minus amount of existing liens
Equitable Title - ANSWER right to obtain full ownership of the property right to use
Legal title - ANSWER actual full ownership right to sell
Regulation Z - ANSWER truth in lending law the regulations provided lenders and
those who help arrange credit for borrower specific guidelines to follow in disclosing to
borrowers their exact cost of credit must State APR
1
,Federal Equal Credit Opportunity Act - ANSWER prohibits discrimination in lending
because of race religion sex national origin marital status or age
Truth in lending Tila - ANSWER promotes informed use of credit
Interest only loan - ANSWER interest-only is paid in early years a fully amortized loan
is acquired at a specific time mostly the same as a straight term
Buy Downs - ANSWER a builder buys down the loan 2% in the first year 1% in the
second the Builder pays the lender to make up the difference
Budget mortgage loan Piti - ANSWER principal interest taxes and insurance the
lender requires 1/12 of the taxes and insurance to be included in the payment
Purchase money mortgage loan - ANSWER Sutherlands money to buyer seller keeps
deed until debt is paid
Wrap-around mortgage loan - ANSWER a second or Junior mortgage includes
balance of First Mortgage plus additional financing needed rarely made
Reverse annuity mortgage Ram - ANSWER reverse mortgage primarily for the elderly
or retired
Open-end mortgage loan - ANSWER equity loan a line of credit secured by a
mortgage percent of equity
Blanket mortgage loan - ANSWER usually for financing a subdivision
2
,Private mortgage insurance PMI - ANSWER if the borrower puts less than 20% down
the lender might require
PMI - ANSWER may possibly be eliminated when the loan-to-value is reduced to
below 80% of the original purchase price or a new appraisal if a borrower does not request
cancellation A lender will automatically eliminate once the equity reaches 22%
FHA mortgage loans federal housing Administration - ANSWER administered by the
HUD Federal Department of Housing and Urban Development does not make loans to cover
this cost mortgage insurance is charged at the origination of the loan approved private
lenders make these loans and approved appraiser must have praised the property and
identify any repairs to be made before issuing a conditional commitment
Graduated payment mortgage GPM - ANSWER monthly payments are reduced in
early years in exchange for higher payments later in the anticipation of increased future
income payments increase over time
Non-judicial foreclosure - ANSWER used in Georgia Linder can take the house
without going to court
Strict foreclosure - ANSWER Linder may I ask the court to allow them to take title
without a foreclosure sale but for a period of time established by the court for the borrower
to repay the loan
Lien theory states - ANSWER the mortgage loan only creates the lien it does not
convey title the lender has a monetary claim when the loan is repaid the lien is removed by
recording a satisfaction non-judicial foreclosure
Attorney - ANSWER legal advice represents the lender at closing
VA mortgage - ANSWER lower down payment or even 0% down only one at a time
3
, Freddie Mac - ANSWER secondary mortgage market for FHA and VA backed by
mortgage pools investors have less risk than buying one loan
Alienation clause - ANSWER due on sale Clause the entire loan balance is due when
sold or exchanged
Right of first refusal - ANSWER if landlord decides to sell it must be offered to the
tenant before anyone else
Option to buy - ANSWER tenant gets possession of property in option to buy at a set
price with a designated period of time not a lease purchase
Gross lease - ANSWER flat leaf straight lease tenant pays fixed amount at specified
intervals landlord pays taxes Insurance repairs and maintenance common for residential
rentals
Net lease - ANSWER triple net lease tenant pays fixed rent plus taxes Insurance
maintenance and repairs common for commercial and Industrial
Graduated leases - ANSWER includes an escalator Clause to protect landlord from
rising cost and inflation
Step Up lease - ANSWER rent increases in predetermined amounts example tenant
pays 800 in the first year 900 in the second and 1000 in the third
Index lease - ANSWER periodic rent adjustment based on changes in the economic
index such as prime lending rate or consumer Price Index
4
Straight note - ANSWER promissory note principal do in one lump sum at the end of
the loan term
Installment note - ANSWER promissory note with specific principal and interest
Principle of Leverage - ANSWER business tool to earn profit like a landlord with rent
FICO - ANSWER most commonly used credit rating system
Negative amortization - ANSWER payment is less than interest amount owing
increases
Equity - ANSWER market value minus amount of existing liens
Equitable Title - ANSWER right to obtain full ownership of the property right to use
Legal title - ANSWER actual full ownership right to sell
Regulation Z - ANSWER truth in lending law the regulations provided lenders and
those who help arrange credit for borrower specific guidelines to follow in disclosing to
borrowers their exact cost of credit must State APR
1
,Federal Equal Credit Opportunity Act - ANSWER prohibits discrimination in lending
because of race religion sex national origin marital status or age
Truth in lending Tila - ANSWER promotes informed use of credit
Interest only loan - ANSWER interest-only is paid in early years a fully amortized loan
is acquired at a specific time mostly the same as a straight term
Buy Downs - ANSWER a builder buys down the loan 2% in the first year 1% in the
second the Builder pays the lender to make up the difference
Budget mortgage loan Piti - ANSWER principal interest taxes and insurance the
lender requires 1/12 of the taxes and insurance to be included in the payment
Purchase money mortgage loan - ANSWER Sutherlands money to buyer seller keeps
deed until debt is paid
Wrap-around mortgage loan - ANSWER a second or Junior mortgage includes
balance of First Mortgage plus additional financing needed rarely made
Reverse annuity mortgage Ram - ANSWER reverse mortgage primarily for the elderly
or retired
Open-end mortgage loan - ANSWER equity loan a line of credit secured by a
mortgage percent of equity
Blanket mortgage loan - ANSWER usually for financing a subdivision
2
,Private mortgage insurance PMI - ANSWER if the borrower puts less than 20% down
the lender might require
PMI - ANSWER may possibly be eliminated when the loan-to-value is reduced to
below 80% of the original purchase price or a new appraisal if a borrower does not request
cancellation A lender will automatically eliminate once the equity reaches 22%
FHA mortgage loans federal housing Administration - ANSWER administered by the
HUD Federal Department of Housing and Urban Development does not make loans to cover
this cost mortgage insurance is charged at the origination of the loan approved private
lenders make these loans and approved appraiser must have praised the property and
identify any repairs to be made before issuing a conditional commitment
Graduated payment mortgage GPM - ANSWER monthly payments are reduced in
early years in exchange for higher payments later in the anticipation of increased future
income payments increase over time
Non-judicial foreclosure - ANSWER used in Georgia Linder can take the house
without going to court
Strict foreclosure - ANSWER Linder may I ask the court to allow them to take title
without a foreclosure sale but for a period of time established by the court for the borrower
to repay the loan
Lien theory states - ANSWER the mortgage loan only creates the lien it does not
convey title the lender has a monetary claim when the loan is repaid the lien is removed by
recording a satisfaction non-judicial foreclosure
Attorney - ANSWER legal advice represents the lender at closing
VA mortgage - ANSWER lower down payment or even 0% down only one at a time
3
, Freddie Mac - ANSWER secondary mortgage market for FHA and VA backed by
mortgage pools investors have less risk than buying one loan
Alienation clause - ANSWER due on sale Clause the entire loan balance is due when
sold or exchanged
Right of first refusal - ANSWER if landlord decides to sell it must be offered to the
tenant before anyone else
Option to buy - ANSWER tenant gets possession of property in option to buy at a set
price with a designated period of time not a lease purchase
Gross lease - ANSWER flat leaf straight lease tenant pays fixed amount at specified
intervals landlord pays taxes Insurance repairs and maintenance common for residential
rentals
Net lease - ANSWER triple net lease tenant pays fixed rent plus taxes Insurance
maintenance and repairs common for commercial and Industrial
Graduated leases - ANSWER includes an escalator Clause to protect landlord from
rising cost and inflation
Step Up lease - ANSWER rent increases in predetermined amounts example tenant
pays 800 in the first year 900 in the second and 1000 in the third
Index lease - ANSWER periodic rent adjustment based on changes in the economic
index such as prime lending rate or consumer Price Index
4
