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Champions Real Estate Finance Questions
and Correct Answers/ Latest Update /
Already Graded
Loan-to-Value Ratio (LTV)
Ans: The percentage of the lesser of the appraised value or
sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the
lender will loan up to 80% of the sales price or appraised value,
whichever is lower.
Package Mortgage
Ans: Includes both real and personal property ( fixtures and
furnishings)
Blanket Mortgage
Ans: Covers more than one piece of property.
Wraparound Mortgage
Ans: Method of financing which preserves the low, exist ing
interest rate on the original note.
All rights reserved © 2025/ 2026 |
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Open-End Mortgage
Ans: Permits additional borrowing on the same note. This is
sometimes called a credit card mortgage or a home equity line
of credit - HELOC.
Budget Mortgage
Ans: The monthly house payment includes principal, interest,
taxes and insurance (known as PITI)
Collateral -Dependent Loans
Ans: A hard money loan is a specific type of asset-based
financing in which a borrower receives funds secured by the
value of a parcel of real estate.
Character
Ans: Is a measure of the willingness of a borrower to make on -
time payments. Credit character is revealed in the borrower's
credit report.
Capacity
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Ans: Is a measure of the borrower's ability to repay the debt,
and is demonstrated through current earnings and job stability.
Capital
Ans: Is the sum of all assets that the borrower has
accumulated.
Collateral
Ans: Is something of value that can be pledged as security for
repayment.
Yield
Ans: Is the return that the investor recieves over the life of the
loan. (Also known as profit)
Originator
Ans: The process of creating a new mortgage loan, including all
steps taken by a lender to attract and qualify a borrower.
Mortgage Broker
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Ans: Typically functions as a middleman between the borrower
and the lender, negotiating, selling or arranging loans to be
delivered to larger investors. At one time originated up t o 80%
of all mortgage loans. (Back on the rise)
Mortgage Banker
Ans: Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial
banks/savings associations. (Held, or "Warehoused")
Correspondent Lender
Ans: Usually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own
funds, at their own risk.
Processing
Ans: Once application is complete the file moves into this
phase.
Underwriting
Ans: The detailed process of evaluating a borrower's loan
application to determine the risk involved for the lender.
All rights reserved © 2025/ 2026 |
Champions Real Estate Finance Questions
and Correct Answers/ Latest Update /
Already Graded
Loan-to-Value Ratio (LTV)
Ans: The percentage of the lesser of the appraised value or
sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the
lender will loan up to 80% of the sales price or appraised value,
whichever is lower.
Package Mortgage
Ans: Includes both real and personal property ( fixtures and
furnishings)
Blanket Mortgage
Ans: Covers more than one piece of property.
Wraparound Mortgage
Ans: Method of financing which preserves the low, exist ing
interest rate on the original note.
All rights reserved © 2025/ 2026 |
, Page |2
Open-End Mortgage
Ans: Permits additional borrowing on the same note. This is
sometimes called a credit card mortgage or a home equity line
of credit - HELOC.
Budget Mortgage
Ans: The monthly house payment includes principal, interest,
taxes and insurance (known as PITI)
Collateral -Dependent Loans
Ans: A hard money loan is a specific type of asset-based
financing in which a borrower receives funds secured by the
value of a parcel of real estate.
Character
Ans: Is a measure of the willingness of a borrower to make on -
time payments. Credit character is revealed in the borrower's
credit report.
Capacity
All rights reserved © 2025/ 2026 |
, Page |3
Ans: Is a measure of the borrower's ability to repay the debt,
and is demonstrated through current earnings and job stability.
Capital
Ans: Is the sum of all assets that the borrower has
accumulated.
Collateral
Ans: Is something of value that can be pledged as security for
repayment.
Yield
Ans: Is the return that the investor recieves over the life of the
loan. (Also known as profit)
Originator
Ans: The process of creating a new mortgage loan, including all
steps taken by a lender to attract and qualify a borrower.
Mortgage Broker
All rights reserved © 2025/ 2026 |
, Page |4
Ans: Typically functions as a middleman between the borrower
and the lender, negotiating, selling or arranging loans to be
delivered to larger investors. At one time originated up t o 80%
of all mortgage loans. (Back on the rise)
Mortgage Banker
Ans: Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial
banks/savings associations. (Held, or "Warehoused")
Correspondent Lender
Ans: Usually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own
funds, at their own risk.
Processing
Ans: Once application is complete the file moves into this
phase.
Underwriting
Ans: The detailed process of evaluating a borrower's loan
application to determine the risk involved for the lender.
All rights reserved © 2025/ 2026 |
