Finance Flashcards Preview

Utah Real Estate > Finance > Flashcards

Flashcards in Finance Deck (51)
Loading flashcards...
1

A lender who originates a loan is referred to as part of the

Primary money market

2

Those who buy existing loans are part of the:

Secondary money market

3

All loans which come after a first mortgage are referred to as ______ ______

junior liens

4

Which of the following are considered both primary and secondary lenders?

Private individuals and insurance companies

5

Which of the following are NOT considered primary lenders?

GNMA (Ginnie Mae) and FNMA (Fannie Mae)

6

FNMA provides a source of funds for approved lenders.

True

7

Sometimes secondary lenders purchase existing loans at a discount.

True

8

The Federal Reserve Bank ____________ set interest rates.

Does Not

9

When you use as little of your own money and as much of other people's money as you can to purchase a property, that is the financial principle of ______.

Leverage

10

. LTVR, or loan to value ratio, is determined by:

dividing the amount of the loan by the value.

11

A clause which allows for a new loan to take priority over one already in place is called the:

Subordination Clause

12

The clause which requires the lender to reconvey all interest in the property when the loan is paid off:

Defeasance Clause

13

The right of the lender to call a loan due and payable immediately, is conveyed in the:

Acceleration Clause

14

A blanket loan uses _______ or more parcels of real property to secure the loan.

2

15

The interest you pay on a loan is

Simple Interest

16

19. The effect in the secondary money market of buying a note at a discount is to __________________ the yield to the secondary lender.

Increase

17

A loan where the mortgagee makes regular monthly payments to the mortgagor is a reverse annuity mortgage.

True

18

“Debt service” refers to which of the following?

Principle and Interest

19

The seller needs to close on the purchase of a new home prior to closing on the current home. A loan that would accommodate this is called a Bridge, Gap or Swing.

True

20

What clause is sometimes placed in a loan to protect lessees?

non- disturbance

21

FNMA is privately owned and government regulated

True

22

To control the flow of money, the Federal Reserve sets the reserve requirement and establishes the discount rate, which is the ______________ they charge the banks who borrow from them.

Interest

23

Discount points are the same as prepaid interest and are used to lower interest rates. One point equals _____ percent. Discount points are used by a primary lender to entice the secondary lender to purchase _______ interest rate loans.

1%, Lower

24

Outrageous and illegal interest is called ______________.

Usury

25

When your payments always include both principal and interest, and there is no balance owing at the end of the loan, this is a _____ ________ note or loan.

fully amortized

26

When your payments are interest only, and you pay off the principal all at once at the end of the loan, this is a _______ note or loan. Any payment which is larger than the scheduled monthly payment is called a balloon payment.

Straight

27

. If the seller carries all or part of the financing to sell the home it’s called:

Purchase money mortgage

28

A loan in which the payments will increase annually up to a maximum, as spelled out in the escalation clause, is referred to as a(n) ____________________ payment mortgage.

Graduated

29

A clause used to discourage borrowers from refinancing when interest rates are falling: ______________________________ penalty clause.

Prepayment

30

When borrowers fail to maintain their property, they are committing

Waste