Real Estate Final Chapter 7 Exam Questions & Answers Rated A+

Methods of Financing - ANSWER-Mortgage loans are the most common choice for financing real property. Mortgage loans fall into two broad categories - conventional and non-conventional loans. Conventional Loan - ANSWER-A loan that is neither federally insured nor guaranteed - a private sector loan. It is neither an FHA or VA loan. Non-conventional Loans - ANSWER-In an effort to encourage homeownership, the federal government insures or guarantees non-conventional mortgage loans through three agencies: the Federal Housing Administration, the U.S. Department of Veterans Affairs and the U.S. Department of Agriculture. All federally backed mortgage loans feature special and, in many cases, relaxed lending guidelines and payment terms. Seller Financing - ANSWER-At times a seller will offer financing to a buyer. It may be similar to a loan from any other lender or it may be in the form of Contract for Deed. Contract for Deed - ANSWER-Also called Installment Contract or Land Contract or Real Estate Contract is also an instrument for financing the sale of real property. It is seller financing that does not transfer legal title immediately. This title retention protects the seller. If the buyer defaults, the seller can regain possession. *Eviction is cheaper than foreclosure. All money up until that point is considered rent. **Contract for Deed benefits the SELLER.** The parties are the VENDOR and the VENDEE, and BOTH must sign. CONTRACT FOR DEED IS AN EXECUTORY CONTRACT. Contract for Deed becomes fully executed when the final loan payment is made and the seller (vendor) delivers the deed to the buyer (vendee). Contract for Deed, otherwise known as an Installment Contract IS NOT THE SAME AS AN INSTALLMENT SALE.