Texas Real Estate Finance Updated 2025 with complete solution

The amount the borrower makes prior to any deductions for taxes or insurance is: A) Guaranteed income B) Net income C) Gross income D) Gross margin - Gross income _______: In the Texas Constitution, a principle residence of a family or adult single person is protected from forced sale for all debt except: property taxes; federal tax liens of both spouses; a home equity lien.....etc... - Homestead ______ ______ ____: lenders use what is called a front-end ratio, which is reflected as a percentage of their gross monthly income. The front-end ratio signifies the payment a buyer can reasonably afford from a lender's point of view. - Front end ratios _______ is a discriminatory practice by which banks refuse or limit loans and mortgages within specific geographic areas, especially older or so-called "bad risk" neighborhoods, including inner-city neighborhoods. also when a lender has refused to make a loan to a potential buyer because of the location of the property. - Redlining ______ ____ new financing is wrapped around the existing mortgage. It is illegal for real estate agents to write contracts with this financing. - Wraparound mortgage ___ ____ ____:a loan that allows a homeowner over the age of 62 to borrow against the equity in his home and not repay the loan until he no longer occupies the property - Reverse annuity mortgage ___ _____ sometimes called an 'interim loan' or interim financing' - Construction mortgage ___ ____: The clause that allows the lender to alternate a second mortgage to the first position and a first mortgage to a second position - Subordination clause___ offered to insure lenders against losses due to non-repayment when they made loans on both new and resale homes. That is why the lenders benefit from offering FHA loans to buyers. the money used by the Federal Housing Administration (FHA) loan is supplied by a qualified lending institution. - FHA ____ ___ ___ (___) is the actual interest rate the borrower pays when all the costs of obtaining credit are included - Annual Percentage Rate (APR) ____ ___ ____ ____: a loan where the borrower pays interest only for a limited amount of time and at the end of the term, the principle is due. - Term or straight loan ____ ____ and ______ _______ are not the same thing. - Community property and joint tenancy ____ ____ is the sale of a property where the lender agrees to settle for less than the amount owed on the property - Short sale ____ _____: is normally used to finance the purchase of raw land. This mortgage allows the developer to include more than one property - Blanket mortgage ____ ____: permits a home buyer to borrow money from a single lender, not only on the value of the land and improvements, but also on the value of equipment, such as appliances - Package mortgage _____ ____ put a cap on interest rate. - Usuary laws _____ _____ are created to protect the borrower. - Usuary laws _____ _____ are loans that are over the conforming loan limit. - Jumbo loans _____ _____ is the total of all the loans that a financial institution or other lender holds at a given time. A list, distribution, or grouping of mortgage loans. - Loan Portfolio_____ ____:the origination, sales and servicing of mortgage loans by a firm or individual. - mortgage banking _____ is the nation's largest investor in residential mortgages. - FNMA ______ _____ are those loans that meet the loan purchase requirements of both Fannie Mae and Freddie Mac. - Conforming loans ______ ______ ______ can be structured many ways. :fixed rate; adjustable rate; balloon - purchase money mortgage ______ is the state law that prohibits the charging of an interest rate in excess of the legal limit. - Usury _______ _____ _____ _____(___) is a federal agency that insures deposits in commercial banks up to $250,000 and , along with the Federal Reserve System, regulates banks and banking procedures. - Federal Deposit Insurance Corporation (FDIC) _______ _____ must belong and any state banks that wish may join the Federal Reserve System. - National banks _______ ______ originate loans where mortgage brokers bring together the lender and the borrower and "arrange" the loan. - Mortgage bankers _______ _______: is the common provision of a mortgage providing the holder with the right to demand that the entire outstanding balance is immediately due and payable in the event of a default. - acceleration clause _______ ______: The clause in the mortgage allowing the purchase to take over the owner's existing loan. the new owner does not necessarily take personal responsibility. - Assumption clause:________ ____ is the rate the Federal Reserve charges its member bank to borrow money - Discount rate ________ ______: the fee charged by the lender for taking and processing the loan application - Origination Fee __________ exchanges mortgage back securities for a block or pool of mortgages. - FNMA (Fannie Mae) Federal National Mortgage Association ________: A right , lien, or claim attached to real property that passes with the title (i.e. easements, judgment liens, mortgage liens). These may reduce the value of the property. - encumbrance ________: In mortgage lending, the person who is charged with approving or denying a loan - Underwriter _______: are defined as the dividing of expenses and income between the buyer and the seller in proportionate shares. - Prorations _______: the systematic and continuous repayment of an obligation through periodic installments until the debt has been repaid in full. - Amortization ______: a settlement statement form required by HUD. - HUD-1 ______: an individual who gathers the loan application and all of the required supporting documentation ( including the property appraisal, credit report history, income, and expenses) so that a lender can consider the borrower for a loan. - processor _____: the process that brings the loan into legal existence - closing _____: the total payment is the same each month but the allocation of interest is different each month. - Amortization___: A limit placed on payments, interest rates and/or the balance of a loan. - Cap A _______ ___ is an amount equal to 1% of the principle amount of the note(loan). Loan discount pts are a one-time charge assessed at the closing by the lender to increase the yield on the mortgage loan (and buy the interest rate down for the mortgagor(borrower)) - discount point A discount point is 1% of: A) market value B) sales price C) cost D) loan amount - loan amount A form of mortgage covering several houses or number of lots is a: A) Package mortgage B) Participation mortgage C) Budget mortgage D) Blanket mortgage - Blanket mortgage