Notary Signing Agent > Chapter 4 > Flashcards

Chapter 4 Flashcards

(49 cards)

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1
Q

Blanket Mortgage

A

A mortgage that covers more than one parcel of real estate.

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2
Q

Broker

A

An individual who brings buyers and sellers together and assists in negotiating contracts for a client.

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3
Q

Broker Processing fee

A

Fee charged to you to have your file packaged and handled over to a selected lender. There is no broker involved in your Quicken Loans transaction; you deal with Quicken Loans from start to finish.

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4
Q

Buy-Down

A

When lender and/or home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. Brokers usually charge a fee or receive a commission for their services.

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5
Q

Buyer’s Market

A

Market conditions that favor buyers. With more sellers than buyers in the market, sellers may be forced to make substantial price concessions.

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6
Q

Caps (interest)

A

Consumer safeguards that limit the amount the interest rate on an adjustable rate mortgage can change in an adjustment interval and/or over the life of the loan.

Ex. if your per-period cap is 1% & current rate is 7%, then your newly adjusted rate must fall between 6% and 8% regardless of actual changes in the index.

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7
Q

Caps (payment)

A

Consumer safeguards that limit the amount monthly payments on an adjustable rate mortgage may change. Since they do not limit amount of interest the lender is earning, these consumer safeguards may cause negative amortization.

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8
Q

Cash out

A

Any cash received when you get a new loan that is larger than the remaining balance of your current mortgage, based upon the equity you have already built up in the house. Cash out amt. is calculated by subtracting sum of the old loan and fees from new mortgage loan.

ex. existing loan $100,000 , refinance w/ a loan of $120,000; left with $18,000 (- 2,000 pts)

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9
Q

Cash reserve

A

A requirement of many lenders that buyer have sufficient cash remaining after closing to make the first two mortgage payments.

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10
Q

Cashier’s check (or Bank Check)

A

A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank’s acct. instead of the consumer’s.

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11
Q

Ceiling

A

The max allowed interest rate of an adjustable rate mortgage.

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12
Q

Certificate of Eligibility

A

Doc issued by the Veterans Administration to qualified veterans and that verifies a veteran’s eligibility for a VA guaranteed loan. Obtainable through local VA office by submitting form DD-214 (Separation paper) + VA form 1880 (request for Certificate of Eligibility)

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13
Q

Certificate of Reasonable Value (CRV)

A

An appraisal issued by the Veterans Administration showing property’s current market value.

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14
Q

Certificate of Title

A

Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance.

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15
Q

Certificate of Veteran Status

A

FHA form filled by the VA to establish a borrower’s eligibility for an FHA vet loan. Obtainable through local VA office by submitting form DD 214 (Separation paper) with form 26-8261a (request for certificate of veteran status)

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16
Q

Chain of Title

A

The chronological order of conveyance of a property from the original owner to the present owner.

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17
Q

Clear title

A

A title that is free of liens and legal questions as to ownership of the property

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18
Q

Closing (or Settlement)

A

The conclusion of your real estate transaction. It includes the delivery of your security instrument, signing of your legal docs and the disbursement of funds necessary to the sale of your home/loan transaction (refinance).

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19
Q

Closing Costs

A

Aka settlement costs
-costs are for services that must be performed to process and close loan application

ex) include title fees, recording fees, appraisal fee, credit report fee, pest inspection, attorney’s fees, taxes, surveying fees.

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20
Q

Collateral

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A

Assets (such as your home) pledged as security for a debt.

21
Q

Commission

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A

Money paid to be a real estate agent/broker for negotiating a real estate or loan transaction

22
Q

Commitment

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A

A promise to lend and a statement by the lender of the terms and conditions under which a loan is made.

23
Q

Comparables

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A

aka “Comparable properties”

  • comparative purposes in appraisal process
  • Comparables are properties under consideration - same size, location, amenities and have recently been sold.
  • Help appraiser determine approximate fair market value of subject property
24
Q

Compound Interest

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A

Interest which is calculated not only on initial principal but also accumulated interest of prior periods.

25
Comparative Market Analysis
An informal estimate of market value that a real estate agent/broker calculates based on sales comparable properties. An appraisal/comparative market analysis are most accurate ways to determine what home is worth.
26
Condominium
Real estate project where each unit owner holds title to a unit in a building. An undivided interest in the common areas of the project, sometimes exclusive/ limited to certain areas. - Can be attached/detached. - Homeowners association dues are included in total monthly mortgage payment for qualifying purposes
27
Conforming Loan
Mortgage loan that meets all requirements to be eligible for a purchase by federal agencies like Fannie Mae and Freddie Mac. -Max conforming loan amt. is $300,700 for a one-unit property ($451,050 in Alaska, Hawaii, Virgin Islands)
28
Consumer Reporting Agency
Company that regularly gathers, files and sells info to creditors to facilitate their decisions to extend credit.
29
Construction Loan
Short-term interim loan for financing cost of construction. Lender advance funds to the builder at periodic intervals as the work progresses.
30
Contingency
A condition that must be satisfied before a contract is legally binding.
31
Contract of Sale
Agreement between the buyer and seller on the purchase price, terms and conditions of a sale.
32
Conventional Loan
Loans that aren't made under any govt. housing program; such as a loan size limits.
33
Conversion Clause
A provision in some ARMs that allows you to change an ARM to a fixed - rate will be set at current rates, and there may be a charge for the conversion feature.
34
Convertible ARMs
A type of ARM loan with the option to convert to be a fixed-rate loan during a given time period.
35
Conveyance
The doc used to affect a transfer, such as a deed, or mortgage
36
Covenant
Written agreement on the use of land or promising certain acts. Homeowner associations often enforce restrictive covenants governing architectural controls + maintenance responsibilities. However, land could be subject to restrictive covenants even if there is no homeowner's association.
37
Credit Bureau
- Clearinghouse for credit history info - credit grantors provide bureau w/ factual info on how their credit customers pay their bills - Bureau regularly assembles this info, along w/ public record info obtained from courthouses around country - into a "file" on each consumer.
38
Credit Report
A report detailing credit history of a prospective borrower that's used to help determine borrower creditworthiness.
39
Credit Score
Statistical method of assessing creditworthiness.
40
Debt-to-Income Ratio
Ratio expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his/her net effective income (FHA/VA loans) or gross monthly income (conventional loans).
41
Deed
Legal doc with which title to real property is transferred from one owner to another. The deed contains a description of property, and is signed, witnessed and delivered to the buyer at closing.
42
Deed of Trust
Legal doc that conveys title to real property to a third party. Third party holds title until the owner of property has repaid the debt in full.
43
Delinquency
Failure to make payments as agreed in loan agreement
44
Down payment
Amount of your home's purchase price you need to supply up front in cash to get your loan (at least 20% of your home's value).
45
Due-on-Sale Clause
Provision in a mortgage or deed of Trust allowing lender to demand immediate payment of the loan balance upon sale of property
46
Duplex
Owner occupied property for more than one family
47
Earnest money
Deposit made by buyer towards the down payment in evidence of good faith when the purchase agreement is signed.
48
Encryption
Procedure used in order to prevent anyone but intended recipient from reading the data.
49
Equifax
One of three largest credit bureaus in the U.S.
Notary Signing Agent
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