LOAN PRE-QUALIFICATIONPRE-APPROVAL

Principles of Real Estate 2 (Champions 2025) Flashcards Loan-to-Value Ratio (LTV)the percentage of value or sales price that a lender is willing to finance.

Descent is when:An individual who receives property in this manner is said

to have acquired the property.External obsolescence refers to:The loss in value of the property caused by factors outside of the property itself.

LOAN PRE-QUALIFICATION/PRE-APPROVAL

BENEFITS:

Buyers can be more realistic when setting their pricing goals. The buyer's agent has a better understanding of the buyer's ability to pay. The buyer's agent can avoid showing properties that the buyer cannot afford. Sellers are somewhat reassured that the buyer has sufficient income and credit to close the transaction.Certain requirements must be met for a lease to be valid:Competent partiesLet and take agreementAdequate considerationLegal purposeDescription of the property (street address is sufficient) The National Association of Realtors Certified Commercial

Investment Member (CCIM) designation is:

A challenging program for commercial real estate professionals that is regarded as the "gold standard" for commercial designations.When calculating the loan to value ratio: The lender will use the sales price or appraised value, whichever is lower.For a property to have value it must have four

characteristics:

Demand,Utility,Scarcity, Transferability Police Power isRight of the government to regulate and control the way land is used.

A Short sale occurs:When an owner/borrower sells a property with the lenders

consent at a price that is not sufficient to pay off the existing mortgage.

Equitable Title is:An interest created by a legal document, such as that held

by a buyer with a signed sales contract who has not yet gone to closing. The buyer has an equitable estate or equitable title.

Lispendens are:Pending lawsuits affecting the property.

A sponsoring broker must:Maintain written policies and procedures to ensure that a sponsored sales agent is competent to conduct authorized activities.Appreciation is:The "passive" increase in value of a parcel due to market forces.Real estate syndications may be organized as: limited or general partnership, or a corporation.Outgoing cash includes the payment of the operating costs

of the property, such as:

Repainting the units before another tenant moves in.

MIP (Mortgage Insurance Premium) insures: Insures the entire loan amount. PMI only insures the difference between the actual loan amount and an 80% LTV, which is the lenders assumed risk.The largest issuers of real estate mortgage investment

conduits are:

Freddie Mac and Fannie Mae On the BUYERS TEMPORARY RESIDENTIAL LEASE: A tenant may use the property only for residential purposes.

Mills are:Rates that can be per hundred or per thousand.

There are two forms of the Real Estate Investment Trust

(REIT):

Equity and mortgage A management agreement is:The role of a property manager is established by a written agreement.right of first refusal is when:A tenant has the right to match or better any offer the landlord may receive on the property before the property is sold to someone else.Promulgated by TREC, the Buyers Temporary Residential

Lease is for use only:

When a buyer occupies the property for no more than 90 days prior to closing.Consideration issomething of legal value given in exchange for a conveyance by the grantor.Sovereignty of the soil is when:The government is the original owner of all land.The best way to ensure that the grantor has good,

marketable title is to get a:

General warranty deed Eminent domain isthe right of government to take private property for public use.

Title is conveyed when the deed is:Delivered and accepted

In a Budget Mortgage:The monthly house payment includes principal, interest,

taxes, and insurance (known as PITI).The covenant of quiet enjoyment is when: The grantor promises the grantee the uninterrupted use of the property.Quietclaim deed isOne with no guarantees, warranties, or covenants. The grantor does not even claim to own the property.

In a Blanket mortgage:A builder may buy more than one lot in a new subdivision,

he will do so with one loan. This type of loan is likely to contain a release clause, allowing the borrower to obtain partial releases of specific lots by making required lump sum payments.PMI (Private Mortgage Insurance) is required when:The LTV of a conventional loan exceeds 80%.

In the Appraisal Process:The value of a property may be affected by social,

economic, governmental and environmental influences. An appraiser must always be aware of these influences and possible changes in them that could affect market value.Functional obsolescence isThe loss in desirability of the style, layout, or function of an element of a property over time.The Consumer Financial Protection Bureau (CFPB)

Regulation X :

Implements the Real Estate Settlement Procedures Act

(RESPA)

The Equal Credit Opportunity Act:prohibits discrimination in any aspect of a credit transaction.In the process of principle of the substitution: The prices at which similar items are sold in a market tend to be similar. The value of the item can be inferred from the price at which a similar item is sold.Fannie Mae helps accomplish the following important

housing objectives:

It addresses imbalances of mortgage credit among regions of the United States by making funds available to capital-deficient areas of the country in order to finance new mortgage originations. It standardizes mortgage loans, thereby attracting investors who traditionally have not invested in the primary market, further strengthening the market.The deceased is said to have died intestate, and his or her

property will be disposed of under the provisions of the:

Texas Statue of Descent and Distribution.Principle of ProgressionThe value of a subject property is increased by the value of surrounding properties.In addition to recording, what else gives constructive notice of ownership?Taking possession of property.The Loan Estimate must be:Provided no later than 3 business days after receipt of the written application.Alienation isAny change in the ownership of real property.

Interstate Succession occurs when:An individual dies,leaving no valid will.

Authority for cleanup under CERLA are granted to: Federal natural resource agencies, States natural resource agencies, Native American tribes.RESPA requires mortgage loan originators to provide

detailed disclosures regarding the:

Transfer, sale, or assignment of mortgage servicing rights.Secondary Market exists for:Purchase and sale of existing mortgages to investors.

Consummation is:The closing of a real estate transaction in which all

appropriate documents are signed, and the proceeds of the mortgage loan are disbursed by the lender.Inverse condemnation is:If a landowner sues the government in order to force the government to buy his or her land.Investment in real estate includes certain tax advantages,

including:

Tax-sheltered income, Favorable capital gains tax treatment, Deferred taxation on exchanges The sales comparison approach is used as: The best indicator of value for existing properties, most often used for residential properties.

A reservation in a deed:Reserves rights for the grantor.

There are four types of leasehold estates: Estate for years, periodic tenancy, tenancy at sufferance, tenancy at will