Colibri Real Estate express chapter 12 Flashcards

Colibri Real Estate express chapter 12 Flashcards The Estoppel certificate- This is a letter that shows the current balance of the loan and is used by lenders when selling the note from one lender to another. states the amount that is currently due and it "stops" the new lender from charging any more than that amount shown in the certificate provided. In essence, it is a "pay-off letter" from one lender to another VA loan characteristics- Partially guarantees permanent long-term loans originated by VA approved lenders on properties that meet VA standards.- enables lenders to issue loans with higher loan-to-value ratios than would otherwise be possible.- The interest rate on a VA-guaranteed loan is usually lower than one on a conventional loan.- The borrower does not pay any premium for the loan guarantee, but does pay a VA funding fee at closing.A conditional commitmentA conditional commitment offers to make a loan if certain provisions are met.This kind of commitment generally applies to construction loans. A typicalcondition for funding the loan is completion of a development phase.The Loan Commitment Fee- a fee charged by a lender to a borrower for an unused credit line, to keep the line open.PrincipalThe capital amount borrowed, on which interest payments arecalculated.Disclosure of costs under Regulation Za lender must disclose all finance charges as well as the true Annualized Percentage Rate (APR) in advance ofclosing. A lender does not have to show the total interest payable over the loanterm or include in finance charges such settlement costs as fees for appraisal,title, credit report, survey, or legal work.Adjustable and fixed rate loans.::::: allow the lender to change the interest rate at specified intervals and by a specified amount.Federal regulations place limits on incremental interest rate increases and on the total amount by which the rate may be increased over the loan term.Mortgage Insurance.Mortgage clause - The lender may require the borrower to obtain private mortgage insurance, or PMI to protect the lender against loss of a portion of the loan (typically 20-25%) in case of borrower default.60 days - Mortgage SatisfactionAll mortgage satisfactions are filed with the clerk of court for the county where the property is located and subsequently provided to the mortgagor within -___ days of the final payment.

Secondary mortgage market organizations include: Federal National Mortgage Association (FNMA, or FannieMae)Federal Home Loan Mortgage Corporation (FHLMC, or FreddieMac)Government National Mortgage Association (GNMA, or GinnieMae)investment firms that assemble loans into packages and sellsecurities based on the pooled mortgageslife insurance companiespension fundsprimary market institutions who also invest as secondary lenders Fixed and graduated payment loans.Loans may have variable payment amounts over the term of the loan, or a single fixed payment amount. With a graduated payment mortgage, the payments at the beginning of the loan term arenot sufficient to amortize the loan fully, and unpaid interest is added to theprincipal balance. Payments are later adjusted to a level that will fully amortizethe loan's increased balance over the remaining loan term.Package loan.A :: finances the purchase of real estate and personal property. For example, a package loan might finance a furnished condominium, complete with all fixtures and decor.Maximum Monthly Housing Expense formulaMonthly Gross Income x Income Ratio Interest may be paid in (2) ...Interest may be paid in advance at the beginning of the payment period, or inarrears at the end of the payment period.loan balance, or remainingbalance.At any point during the life of a mortgageloan, the remaining unpaid principal is called the :: or :: loan-to-value ratio, or LTV.The relationship of the loan amount to the property value, expressed as a percentage, is called the loan-to-value ratio, or LTV. To protect further against loss, a lender will usually lend only a portion of the property's value.

Payment of Principal and Interest: Prepayment and Late

Charges.Mortgage clause that states the borrower must make timely payments according to the terms of the note.conventional mortgage loan::: is a permanent long-term loan that is not FHA insured or VA-guaranteed. Market rates usually determine the interest rate onthe loan. Because of the lack of insurance or guarantee by a governmentagency, the risk to a lender is greater for a conventional loan than for a nonconventional loan. This risk is usually reflected in higher interest rates andstricter requirements for the down payment and the borrower's incomequalification.Interest-only loan.periodic payments over the loan term apply only to interest owed, not to principal. At the end of the term, the full balance must be paid off in a lump-sum payment. Since these loans have no periodic principal payback, their monthly payments are smaller than amortizing loans for the

same amount at the same rate of interest.Deed of Trust::: conveys title to the property in question from the borrower (trustor) to a trustee as security for the loan. The trustee is a third party fiduciary. While the loan is in place, the trustee holds the title on behalf of the lender, who is the

beneficiary of the trust. On repayment of the loan, the borrower receives the title from the trustee in the form of a deed of reconveyance.Occupancy, Preservation, Maintenance and Protection of the Property.Mortgage Clause - The borrower must take and maintain occupancy of the property as the borrower's principal residence according to the lender's requirements. The