CHAMPIONS REAL ESTATE STUDYS QUESTIONS
AND ANSWERS SURE A+
✔✔Nonrecourse clause - ✔✔Protect the seller of the security from liability in the event
of a default by the borrower
✔✔Acceleration Clause - ✔✔in the state of default whole amt of principal is due
✔✔Escalation Clause - ✔✔allows lender to raise existing interest rate
✔✔Assumption clause - ✔✔Allows the new borrower to take over the payments on an
existing loan underspecified terms and conditions
✔✔Interest - ✔✔Is money paid at a particular rate for the use of money loan to a person
for entity it is the cost of borrowing money
✔✔Interim Interest/ per diem - ✔✔buyer pays from and including day of closing to the
end of closing month on Part A
✔✔Points - ✔✔1 point = 1% of loan amount
✔✔Discount points - ✔✔pre-paid interest on a loan
✔✔amortizing loan - ✔✔The monthly payment includes an amount that is applied first 2
inches that is due with the remainder of the loan payment being applied to the
outstanding loan balance
✔✔Index - ✔✔Is what the wind or uses as an instrument for measuring changes in
interest rates
✔✔Margin - ✔✔The percent added to the index in order to calculate the payment
interest-rate
, ✔✔Fully indexed rate - ✔✔Equal to the margin plus the index and is usually to the
nearest 1/8 of a percent
✔✔Lifetime cap - ✔✔Limits the interest rate increases over the life of the loan
✔✔Advantages of arm loans - ✔✔Lower interest rate higher loans falling right
✔✔Disadvantage of arm - ✔✔Early refinancing unpredictable home mortgage payments
long time cost
✔✔Hybrid ARM - ✔✔Offer the consumer and interest-rate that is fix for initial period of
time then read just over the remainder of the life of the loan
✔✔Interest only arms - ✔✔Allows a buyer to pay only the entries for a specified number
of years typically 3 to 10
✔✔Collateral dependent loans - ✔✔A hard money loan is a specific type of asset based
financing it was a borrower receives find secured by the value of a parcel of real estate
✔✔Blanket Mortgage - ✔✔Covers more then one piece of property
✔✔Package Mortgage - ✔✔The borrower pledges both real and personal property as
security for a loan.
✔✔Budget Mortgage - ✔✔A mortgage that includes property taxes and insurance;
along with principal and interest
✔✔Wraparound Mortgage - ✔✔Is a method of financing would preserve the low existing
interest rate on the original note the wrap around his seller financing and with a new
loan takes a secondary lien position and the original mortgage is not repaid
✔✔open end mortgage - ✔✔Permits additional borrowing on the same note and
mortgage
✔✔Closed end mortgage - ✔✔Specific dollar amount and does not allow for additional
borrowing on the same note and mortgage
✔✔Reverse mortgage - ✔✔Homeowners who are at least 62 years of age can borrow
against the equity in their property using the reverse mortgage loan becomes due upon
the sale of the property or the death of the owner
✔✔Refinance - ✔✔Is the pay off of the existing loan with the proceeds of a new loan to
the same borrower
AND ANSWERS SURE A+
✔✔Nonrecourse clause - ✔✔Protect the seller of the security from liability in the event
of a default by the borrower
✔✔Acceleration Clause - ✔✔in the state of default whole amt of principal is due
✔✔Escalation Clause - ✔✔allows lender to raise existing interest rate
✔✔Assumption clause - ✔✔Allows the new borrower to take over the payments on an
existing loan underspecified terms and conditions
✔✔Interest - ✔✔Is money paid at a particular rate for the use of money loan to a person
for entity it is the cost of borrowing money
✔✔Interim Interest/ per diem - ✔✔buyer pays from and including day of closing to the
end of closing month on Part A
✔✔Points - ✔✔1 point = 1% of loan amount
✔✔Discount points - ✔✔pre-paid interest on a loan
✔✔amortizing loan - ✔✔The monthly payment includes an amount that is applied first 2
inches that is due with the remainder of the loan payment being applied to the
outstanding loan balance
✔✔Index - ✔✔Is what the wind or uses as an instrument for measuring changes in
interest rates
✔✔Margin - ✔✔The percent added to the index in order to calculate the payment
interest-rate
, ✔✔Fully indexed rate - ✔✔Equal to the margin plus the index and is usually to the
nearest 1/8 of a percent
✔✔Lifetime cap - ✔✔Limits the interest rate increases over the life of the loan
✔✔Advantages of arm loans - ✔✔Lower interest rate higher loans falling right
✔✔Disadvantage of arm - ✔✔Early refinancing unpredictable home mortgage payments
long time cost
✔✔Hybrid ARM - ✔✔Offer the consumer and interest-rate that is fix for initial period of
time then read just over the remainder of the life of the loan
✔✔Interest only arms - ✔✔Allows a buyer to pay only the entries for a specified number
of years typically 3 to 10
✔✔Collateral dependent loans - ✔✔A hard money loan is a specific type of asset based
financing it was a borrower receives find secured by the value of a parcel of real estate
✔✔Blanket Mortgage - ✔✔Covers more then one piece of property
✔✔Package Mortgage - ✔✔The borrower pledges both real and personal property as
security for a loan.
✔✔Budget Mortgage - ✔✔A mortgage that includes property taxes and insurance;
along with principal and interest
✔✔Wraparound Mortgage - ✔✔Is a method of financing would preserve the low existing
interest rate on the original note the wrap around his seller financing and with a new
loan takes a secondary lien position and the original mortgage is not repaid
✔✔open end mortgage - ✔✔Permits additional borrowing on the same note and
mortgage
✔✔Closed end mortgage - ✔✔Specific dollar amount and does not allow for additional
borrowing on the same note and mortgage
✔✔Reverse mortgage - ✔✔Homeowners who are at least 62 years of age can borrow
against the equity in their property using the reverse mortgage loan becomes due upon
the sale of the property or the death of the owner
✔✔Refinance - ✔✔Is the pay off of the existing loan with the proceeds of a new loan to
the same borrower
