REAL 4000 UGA ACTUAL TEST 3 QUESTIONSAND

REAL 4000 UGA (ACTUAL / ) TEST 3 QUESTIONSAND

VERIFIED ANSWERS

Reverse mortgage The bank sends you a check every month, and at the end of the mortgage you owe the lump sum of all those checks.

Interest-only balloon mortgage Only monthly payments on interest are required, no required monthly payments on principle.

Borrower is required to pay off entire principle balance at the end of 5 or 7 years.

Interest only amortizing mortgage For the first 15 years, only monthly payments on interest are required.

After that it converts to a fully amortizing 15 year loan (interest and principle are payed off)

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Hybrid ARM Adjustable rate mortgage that locks the initial rate for 2,3,5,7, or 10 then becomes a traditional ARM

Option ARM Borrower can choose one of three payments 1.) fully amortizing 2.) interest only 3.) minimum monthly payment determined by a very low interest rate. (leads to rising loan balance, negative amortization)

Subprime loans all subprime loans have low introductory payments that lead to negative amortization and a large jump in payment at some point 2-28 hybrids interest only option ARM

Alt-A loans Conventional loans with less stringent underwriting requirements 2 / 3

higher LVT lower credit scores reduced documentation of income or assets

Somewhere in between conventional and subprime in terms of quality.

NINJA loans No income, job, or assets.

Loans made only off of credit score and appraisal of the property

Depository lenders

Are financial intermediaries: the pool other peoples money

together for the purpose of large scale uses.

Are portfolio lenders: create loans and retain them in portfolio

of investments

Saving associations

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