Bonds

Question 1

What is a bond?

Answer 1

• a loan made to the owner of a property
• where the property is the security for the loan

Question 2

What is a mortgage loan or home loan?

Answer 2

• the money the buyer borrows from a bank

Question 3

What is a mortgage bond?

Answer 3

• the document the buyer signs to promise that they will pay back the loan

Question 4

When must the buyer pay back the loan?

Answer 4

• monthly over a certain period
• usually 20 to 30 years

Question 5

What is the qualifying criteria for a home loan?

Answer 5

• a stable income

Question 6

What kinds of property may be financed through bonds?

Answer 6

• only residential property
• all other normal credit evaluations or checks apply

Question 7

Why does the bank send a property assessor?

Answer 7

• to see if the house is worth the amount the buyer has requested for it

Question 8

What is loan to value (LTV)?

Answer 8

• the percentage the bank is willing to lend a borrower

Question 9

How is LTV calculated?

Answer 9

• by dividing the loan amount by the estimated value of the property