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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
ARM stands for
Adjustable rate mortgage. the interest rate will change over time.
This is a type of guaranteed loan
VA
LTV means this.
Loan to Value:
$100,000 home -$20,000 down=$80,000
$80,000/$100,000=.80 LTV
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.
This is the rate at which banks borrow money
Discount
A type of letter that indicates a candidate for a loan has declared their own financial status.
Pre-qualification letter
PITI stands for
Principle, interest, tax and insurance
In a straight loan borrowers make "_________ only" payments with a balloon payment at the end
Interest
A large payment due at the end of a partially amortized loan.
Balloon Payment
The Mortgage Market where Banks sell their mortgages to other institutions
Secondary Mortgage market
You'll want your buyers to have one of these before you start driving all over creation shopping for homes with them.
Pre approval letter
Proof of Funds
If a borrower is in default and goes through foreclosure what happens if the foreclosure sale does not provide enough funds to satisfy the debt?
The borrower still owes the difference to the bank.
A person who controls a property in foreclosure to ensure it continues running smoothly has been give a _________ by the bank
Receivership
This act created laws to protect consumers who finance. All loan terms must be disclosed.
Truth in Lending Act
Regulation Z
A clause that says when you sell your home the bank can collect all money due from the mortgage.
Alienation clause
Theory that when a bank loans money to someone to purchase a home, the bank actually owns it.
Title Theory
A loan which is neither guaranteed nor insured.
Conventional Loan
This government 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
A loan that does not fit FNMA, GNMA guidelines to be purchased on the secondary market
Jumbo Loan
Non-conforming
The Prime Rate is?
This is the rate at which people with great credit can borrow money.
Clause in a mortgage that allows the bank to demand payment in full if the borrower defaults on the loan
Acceleration Clause
What is 1 point on a $100 loan given to a buyer who buys home worth $150
$1