1
This is the Mortgage Market where people borrow money from banks.
Primary Mortgage market
DTI stands for
Debt to income:
Monthly Bills (part)/ Monthly income (whole)= DTI
$2,057 (Bills)/ $6700 (income)=.307 (DTI)
P W Rate
This is a type of guaranteed loan
VA
The Mortgage Market where Banks sell their mortgages to other institutions
Secondary Mortgage market
A loan/voluntary lien where the borrower can request additional funds up to but not exceeding the original mortgage amount.The amount is based on the home owners equity.
HELOC
The reduction of a loan by periodic payments
Amortization
The typical mortgage for a single family, primary residence is an amortized loan. Another term for this is:
A direct reduction loan. At the end of the term its paid off.
A type of letter that indicates a candidate for a loan has declared their own financial status.
Pre-qualification letter
A loan that does not fit FNMA, GNMA guidelines to be purchased on the secondary market
Jumbo or Non conforming
A type of letter that indicates the bank has reviewed your financial documents
Pre approval letter
In a straight loan borrowers make "_________ only" payments with a balloon payment at the end
interest only
ARM stands for
Adjustable rate mortgage. the interest rate will change over time.
This act created laws to protect consumers who finance. All loan terms must be disclosed.
Truth in lending. Regulation Z
A clause that says when you sell your home the bank can collect all money due from the mortgage.
Alienation clause
A loan which is neither guaranteed nor insured.
A conventional loan
A person who controls a property in foreclosure to ensure it continues running smoothly has been give a _________ by the bank
Receivership
A large payment due at the end of a loan.
A balloon payment
LTV means this.
Loan to Value:
$100,000 home -$20,000 down=$80,000
$80,000/$100,000=.80 LTV
This is the rate at which people with great credit can borrow money.
Prime rate
What is 1 point on a $100 loan
$1
This organization creates guidelines for lenders to issue loans to individuals in lower income brackets. They do not issue loans, they insure the lenders against default.
FHA
This is the rate at which banks borrow money
Discount rate
PITI stands for
Principle, interest, tax and insurance
A home is appraised by a lender before issuing a loan to be certain provides sufficient ______ compared to the loan which is being issued.
collateral
Theory that when a bank loans money to someone to purchase a home, the bank actually owns it.
Title Theory