Loan Sign Test #6 Questions 2024 Solved 100%
borrower (mortgagor) - ANSWERan individual who applies for and receives funds in
the form of a loan
title - ANSWERthe document that gives evidence of ownership of property.
individuals who have legal ownership in property are considered "on title" ; they will
sign the mortgage other documentation
refinancing - ANSWERprocess of paying off one loan with proceeds from a new loan
secured by the same property
escrow company - ANSWERneutral third party that distributes legal documents and
funds on behalf of a buyer and seller (ie middle man), making sure all parties behave
and follow through with the terms
escrow agent - ANSWERperson with fiduciary responsibility to buyer and seller, or
borrower and lender, to ensure all terms of the purchase/sale are carried out
title company - ANSWERmakes sure that a piece of real estate is legitimate, then
issues title insurance for that property that protects both the lender and owner from
potential lawsuits resulting from disputes
main responsibility in a mortgage transaction is to accurately record liens, lien
holders and ownership to the property in the transaction, specifically with the
county the property resides in
title company's role is to be in charge of anything that is being recorded against the
property.
title insurance - ANSWERprotects a lender against any title dispute that may arise
over a particular property; you may also purchase owner's title insurance as a
homeowner
required to close on your home
lender - ANSWERthe bank that is lending the money
principal - ANSWERamount of debt, not counting interest, left on the loan
note - ANSWERbasically a "contract"
e.g. bank note specifies terms of loan that borrower agrees to, like % interest,
payment over x years, amount borrowed
,deed of trust - ANSWERaka mortgage
5 main functions:
1. records who actually owns the property
2. records the amount the borrower is borrowing, aka. the lien amount
3. records who is lending the money, aka lien holder
4. records the legal description of the property, ie. street address
5.states the rules and regulations in which the property owner has to abide by
lien holder - ANSWERwho is lending the money
lien - ANSWERa form of security interest granted over an item of property to secure
the payment of a debt or performance of some other obligation
lien amount - ANSWERamount that the borrower borrowed from bank
rider - ANSWERamendments to the deed of trust done by the lender
ex. condo riders, adjustable rate riders, PUD riders
interest rate - ANSWERwhat the borrower agrees to pay back the bank on the money
that is borrowed
mostly interest rates are determined by how risky the investment is= the less
perceived risk, the lower the interest rate; along with a combination of credit score,
LTV, term, and whether or not you occupy the property
Loan to value - ANSWERhow much you owe vs the value (appraised value of sale
price, whichever is lower) of the home
the higher the loan to value, the higher the perceived risk
ex. if house is worth 200k and you owe 100k, you loan to lvalue is 50%
fix rate note - ANSWERmeans that interest rates will not change for the duration of
the loan
the longer the term, the higher the interest rate-> so should opt for shorter term.
however the payment amount would be higher
ex. 15 year loan rate might be 5% while 30 year loan may be 5.5%
, adjustable rate mortgage loans (ARM) - ANSWERinterest rate will change, often after
a set amount of years of fixed payments
initially the rate may be low bc based on payment that I 30 years, but rate will
change/adjust after "X" years, most common is 3/1, 5/1,7/1, 10/1 which means fixed
for 3,5,7,10 years and then changes EVERY year after
after the term is up, the rate will change via an index plus a margin that is set by the
lender. margin never changes but the index will go up/down based on LIBOR or
treasury note (if index is 3% and margin is 3% then rate for that year would be 6%)
interest rate - ANSWERwhat the borrower agrees to pay back the bank on the money
that is borrowed
mostly interest rates are determined by how risky the investment is= the less
perceived risk, the lower the interest rate; along with a combination of credit score,
LTV, term, and whether or not you occupy the property
home equity line of credit (HELOC) - ANSWERline of credit that is tied to the equity
of your house
ex. home is worth 500k and there's a first loan of 200k then there's 300k of equity->
let's say bank approves borrower for line of credit of 100k. Borrower may buy car for
15k on that line of credit and then have 85k remaining they could charge against
HELOC
Unlike a loan that has a specific payoff term(15,20,30 years), the line of credit works
like a credit card. You make payments only on the amount borrowed.
Reverse Mortgage - ANSWERenables older homeowners (62+) to convert part of
their equity in their homes into tax-free income without having to sell the home, give
up title, or take on a new monthly mortgage payment.
allows homeowners to borrow money using their home as security for the loan.
a type of loan that allows homeowners ages 62 and older, typically who've paid off
their mortgage, to borrow part of their home's equity as tax-free income. Unlike a
regular mortgage in which the homeowner makes payments to the lender, with a
reverse mortgage, the lender pays the homeowner.
ex. if the home's value is 500k and the borrower owes 100k, a reverse mortgage
would pay the equity you own on a monthly basis, until reaching a cap
Discount Points/ Buy Down - ANSWERMortgage points, also known as discount
points, are fees a homebuyer pays directly to the lender (usually a bank) in exchange
borrower (mortgagor) - ANSWERan individual who applies for and receives funds in
the form of a loan
title - ANSWERthe document that gives evidence of ownership of property.
individuals who have legal ownership in property are considered "on title" ; they will
sign the mortgage other documentation
refinancing - ANSWERprocess of paying off one loan with proceeds from a new loan
secured by the same property
escrow company - ANSWERneutral third party that distributes legal documents and
funds on behalf of a buyer and seller (ie middle man), making sure all parties behave
and follow through with the terms
escrow agent - ANSWERperson with fiduciary responsibility to buyer and seller, or
borrower and lender, to ensure all terms of the purchase/sale are carried out
title company - ANSWERmakes sure that a piece of real estate is legitimate, then
issues title insurance for that property that protects both the lender and owner from
potential lawsuits resulting from disputes
main responsibility in a mortgage transaction is to accurately record liens, lien
holders and ownership to the property in the transaction, specifically with the
county the property resides in
title company's role is to be in charge of anything that is being recorded against the
property.
title insurance - ANSWERprotects a lender against any title dispute that may arise
over a particular property; you may also purchase owner's title insurance as a
homeowner
required to close on your home
lender - ANSWERthe bank that is lending the money
principal - ANSWERamount of debt, not counting interest, left on the loan
note - ANSWERbasically a "contract"
e.g. bank note specifies terms of loan that borrower agrees to, like % interest,
payment over x years, amount borrowed
,deed of trust - ANSWERaka mortgage
5 main functions:
1. records who actually owns the property
2. records the amount the borrower is borrowing, aka. the lien amount
3. records who is lending the money, aka lien holder
4. records the legal description of the property, ie. street address
5.states the rules and regulations in which the property owner has to abide by
lien holder - ANSWERwho is lending the money
lien - ANSWERa form of security interest granted over an item of property to secure
the payment of a debt or performance of some other obligation
lien amount - ANSWERamount that the borrower borrowed from bank
rider - ANSWERamendments to the deed of trust done by the lender
ex. condo riders, adjustable rate riders, PUD riders
interest rate - ANSWERwhat the borrower agrees to pay back the bank on the money
that is borrowed
mostly interest rates are determined by how risky the investment is= the less
perceived risk, the lower the interest rate; along with a combination of credit score,
LTV, term, and whether or not you occupy the property
Loan to value - ANSWERhow much you owe vs the value (appraised value of sale
price, whichever is lower) of the home
the higher the loan to value, the higher the perceived risk
ex. if house is worth 200k and you owe 100k, you loan to lvalue is 50%
fix rate note - ANSWERmeans that interest rates will not change for the duration of
the loan
the longer the term, the higher the interest rate-> so should opt for shorter term.
however the payment amount would be higher
ex. 15 year loan rate might be 5% while 30 year loan may be 5.5%
, adjustable rate mortgage loans (ARM) - ANSWERinterest rate will change, often after
a set amount of years of fixed payments
initially the rate may be low bc based on payment that I 30 years, but rate will
change/adjust after "X" years, most common is 3/1, 5/1,7/1, 10/1 which means fixed
for 3,5,7,10 years and then changes EVERY year after
after the term is up, the rate will change via an index plus a margin that is set by the
lender. margin never changes but the index will go up/down based on LIBOR or
treasury note (if index is 3% and margin is 3% then rate for that year would be 6%)
interest rate - ANSWERwhat the borrower agrees to pay back the bank on the money
that is borrowed
mostly interest rates are determined by how risky the investment is= the less
perceived risk, the lower the interest rate; along with a combination of credit score,
LTV, term, and whether or not you occupy the property
home equity line of credit (HELOC) - ANSWERline of credit that is tied to the equity
of your house
ex. home is worth 500k and there's a first loan of 200k then there's 300k of equity->
let's say bank approves borrower for line of credit of 100k. Borrower may buy car for
15k on that line of credit and then have 85k remaining they could charge against
HELOC
Unlike a loan that has a specific payoff term(15,20,30 years), the line of credit works
like a credit card. You make payments only on the amount borrowed.
Reverse Mortgage - ANSWERenables older homeowners (62+) to convert part of
their equity in their homes into tax-free income without having to sell the home, give
up title, or take on a new monthly mortgage payment.
allows homeowners to borrow money using their home as security for the loan.
a type of loan that allows homeowners ages 62 and older, typically who've paid off
their mortgage, to borrow part of their home's equity as tax-free income. Unlike a
regular mortgage in which the homeowner makes payments to the lender, with a
reverse mortgage, the lender pays the homeowner.
ex. if the home's value is 500k and the borrower owes 100k, a reverse mortgage
would pay the equity you own on a monthly basis, until reaching a cap
Discount Points/ Buy Down - ANSWERMortgage points, also known as discount
points, are fees a homebuyer pays directly to the lender (usually a bank) in exchange
