REE 3043PREP ALREADY PASSED
Fully Amortized Mortgage - =Periodic payments that are sufficient enough to cover the entirety
of the loan and the entirety of the interest by the end of the term
Interest only loan - =Making payments toward only the interest during the duration of the loan.
At the end the principal is paid as one payment.
Ballon loan - =When a loan amortizes over 25 years but the loan matures at year 10. Used in
commercial loans
Reverse mortgage - =A loan by which a homeowner receives a lump sum, monthly payments, or
a line of credit based on the homeowner's equity in the property secured by the mortgage. The
loan must be repaid at a prearranged date, upon the death of the owner, or upon the sale of the
property.
ARM- Adjustable rate mortgage - =To start a fixed payment is made then interest rate adjust
according to the market. Margin rate stays the same index adjusts
Option ARM - =Allows you to decide the amount of your payment. The initial amount covers
interest, remaining goes toward principle
Negative amortization - =Occurs when the payment is not enough to even cover interest.
Remaining interest is applied to principle causing loan balance to increase
Mortgage payments - =Cover PITI Principle, Interest, Taxes, insurance
Interest payments - =Cover the cost of using money for the past
Market value - =Probable selling price. You want this high
Investment value - =How much an investor finds the property worth. You want this high
Fully Amortized Mortgage - =Periodic payments that are sufficient enough to cover the entirety
of the loan and the entirety of the interest by the end of the term
Interest only loan - =Making payments toward only the interest during the duration of the loan.
At the end the principal is paid as one payment.
Ballon loan - =When a loan amortizes over 25 years but the loan matures at year 10. Used in
commercial loans
Reverse mortgage - =A loan by which a homeowner receives a lump sum, monthly payments, or
a line of credit based on the homeowner's equity in the property secured by the mortgage. The
loan must be repaid at a prearranged date, upon the death of the owner, or upon the sale of the
property.
ARM- Adjustable rate mortgage - =To start a fixed payment is made then interest rate adjust
according to the market. Margin rate stays the same index adjusts
Option ARM - =Allows you to decide the amount of your payment. The initial amount covers
interest, remaining goes toward principle
Negative amortization - =Occurs when the payment is not enough to even cover interest.
Remaining interest is applied to principle causing loan balance to increase
Mortgage payments - =Cover PITI Principle, Interest, Taxes, insurance
Interest payments - =Cover the cost of using money for the past
Market value - =Probable selling price. You want this high
Investment value - =How much an investor finds the property worth. You want this high
