Champions Real Estate Finance Exam 2023Loan-to-Value Ratio (LTV) - ANSWERThe percentage of the lesser of the appraisedvalue or sales price that the lender will lend.ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to80% of the sales price or appraised value, whichever is lower.Package Mortgage - ANSWERIncludes both real and personal property ( fixtures andfurnishings)Blanket Mortgage - ANSWERCovers more than one piece of property.Wraparound Mortgage - ANSWERMethod of financing which preserves the low,existing interest rate on the original note.Open-End Mortgage - ANSWERPermits additional borrowing on the same note. Thisis sometimes called a credit card mortgage or a home equity line of credit - HELOC.Budget Mortgage - ANSWERThe monthly house payment includes principal, interest,taxes and insurance (known as PITI)Collateral -Dependent Loans - ANSWERA hard money loan is a specific type ofasset-based financing in which a borrower receives funds secured by the value of aparcel of real estate.Character - ANSWERIs a measure of the willingness of a borrower to make on-timepayments. Credit character is revealed in the borrower's credit report.Capacity - ANSWERIs a measure of the borrower's ability to repay the debt, and isdemonstrated through current earnings and job stability.Capital - ANSWERIs the sum of all assets that the borrower has accumulated.Collateral - ANSWERIs something of value that can be pledged as security forrepayment.Yield - ANSWERIs the return that the investor recieves over the life of the loan. (Alsoknown as profit)Originator - ANSWERThe process of creating a new mortgage loan, including all stepstaken by a lender to attract and qualify a borrower.Mortgage Broker - ANSWERTypically functions as a middleman between the borrowerand the lender, negotiating, selling or arranging loans to be delivered to larger investors.Preview Mode
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