An amortized loan is a loan that requires equal payment over its life; its payments include both interest and repayment of the debt. 11) Where on the Uniform Settlement Statement will you find the information that deals with the seller's side of the transaction? d) Amanda has done nothing wrong. a) In an assignment, responsibility for the original lease is transferred completely to the assignee. a) when the loan-to-value ratio reaches 50 percent. You borrow $200,000 to buy a house, using a fully-amortizing mortgage with monthly payments for 30 years at an annual interest rate of 5%. b) Select a specific, limited course of action for recouping their losses. Solve for PMT = $4,794.20. a) Fee for clearing the title b) Broker commission c) Homeowner's insurance d) Transfer taxes. What is her loan-tovalue? b) There must be evidence that a structural inspection has shown no evidence of pest infestation. d) it may also restrict some uses. The friend could withdraw $29,433 at the end of each year for 20 years, assuming he could earn an Or, enter in the loan amount and we will calculate your monthly payment. ARMs are generally favored by people who dont mind the unpredictability of rising and falling interest rates. b) voidable and illegal contract. d) void. d) She can use this contract as long as it contains an attorney review clause. Input data as follows: N = 4; I/YR = 5; PV = -17,000; and FV = 0. Quantian on Twitter: "@000Cana Assuming amortization, the average OBOR The principal is repaid in increasing increments through regular monthly payments. d) require higher down payments than government-backed loans require. These are usually referred to as balloon payment loans or interest-only loans. d) It eliminates fraud in real estate contracts. a) a felony. Press the report button to see a monthly payment schedule. B. c) The apartment can be decontrolled. 11) If a seller prepaid an insurance policy of $2,100 and the closing is set for March 15, using the 12-month/30-day method, what will the buyer owe the seller? a) both an instrument of conveyance and a contract. Which statement is TRUE? c) a misdemeanor. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. a) Title company b) Attorney's office c) Lender's site d) Broker's office, a) Second mortgage on a condominium b) Seller-financed loan c) Hotel mortgage d) Loan assumption, 5) Most lenders require buyers to purchase. In short, borrowers know how much theyll be expected to pay each month, so there are no surprises. b) The buyer brings a blank check and finds out the final amount at the closing meeting. d) every two years. a) Condominium purchase b) Seller-financed loan c) Loan involving a second mortgage d) Federally-insured loan. 4) Which of these items is not included in a lease agreement? a) One calendar week b) One business day c) Two calendar days d) One business week. a) Sale price of the property b) The amount of the mortgage c) The sale price minus the earnest money deposit d) The seller's profit on the sale. A loan that requires payments of both principal and interest. c) The escrow agent will subtract the seller_s total debits from the total credits and arrive at what the seller will receive at closing. 1) Which one of the following documents is least like a binder? At this point, assuming all other contract validity items are in order, what is the status of the offer? 3) What is the most common form of property description? 9) Sellers Glen and Jill are closing on their home sale next week. D. Pure discount. b) All the parties must initial the changes. c) have more paperwork than government-backed loans. a) Window Loan b) Home Equity Loan c) Reverse Annuity Mortgage d) Blanket Loan. c) They are always a debit to one party and a credit to the other party for the same amount. c) They are always a debit to one party and a credit to the other party for the same amount. 15) Which of the following does not meet the criteria for a VA loan? . 9) How does a borrower use private mortgage insurance? A fixed interest rate remains the same for a loan's entire term, making long-term budgeting easier. 3) Recording the deed is done through which of these? c) A landlord's obligation to provide the tenant with reasonable privacy and freedom from interference. 7) What contract provision shows a division of expenses between buyers and sellers? Several kinds of mortgage products are available on the market, but they boil down to two basic categories: variable-rate loans and fixed-rate loans. 5) Which statement is true about accepting referral fees? 5) What is the interest rate on an ARM tied to? 3) Mary has remained in her apartment two weeks past her move-out date, without any payment. 3) How might a voidable contract become valid? The term fixed-rate mortgage refers to a home loan that has a fixed interest rate for the entire term of the loan. c) will be a debit to the seller. 4) Which part of a contract deals with the legal requirements to enter into a contract? c) settlement statement. c) for a lender in a market that is decreasing in value. The loan payments will decrease over time. Your wealthy uncle is willing to lend you the money as an amortized loan. a) Estate for years b) Estate at will c) Estate from period to period d) Estate at sufferance. b) Only attorneys can hold and deposit earnest money. They prefer these mortgage products because theyre more predictable. a) Margin b) Index c) Payment cap d) Rate cap. 9) Which contract provision makes previous promises null and void? 6) A homeowner's insurance policy typically covers all but which of these? a) If neither party agrees to the terms. 5) In which type of loan is the payment allocated only to interest? 80%., A major negative of balloon loan . Amortization schedules are useful because interest and principal repayment may be treated differently for When interest rates rise, a fixed-rate mortgage will have lower risk for a borrower and higher risk for a lender. This action is based on which mortgage feature? b) Norm can complete the lease agreements as long as he has a lawyer co-sign them. a) estates at will. c) implied contract. You plan to sell the property after 12 years. d) 10 percent of the loan amount. d. The principal is forgiven over the loan period so does not have to be repaid? 1) Grant moves into his new office space while he awaits the completion of the negotiations of the lease terms. 11) What type of loan is often used when a seller will not accept a property sale contingency? c) the mortgage itself provides the only security for the loan. all of the above., Avery buys a house for $250,000 and makes a down payment of $50,000. fully amortized loan. 9) Which of the following is a characteristic of land leases? b) They are always a debit to the seller and a credit to the buyer. b) is also called an exclusive freehold estate. The offers that appear in this table are from partnerships from which Investopedia receives compensation. d) after 7 years of loan payments. and wishes to exhaust the fund over 20 years with equal annual withdrawals, how much can he withdraw at the end of each year? Borrowers who. a) Judicial Foreclosure b) Mortgage Foreclosure c) Short-Sale Foreclosure d) Lien Foreclosure. a) for a buyer who plans to own the property for a short time and believes the property will appreciate during that time. c) If the party who wants to enforce the contract seeks legal relief. What is the adjustment made at closing? Study with Quizlet and memorize flashcards containing terms like The FHA has been influential in bringing about the acceptance of low down payments. Finance Chapter 6 Flashcards | Quizlet 7,300. d) Involuntary conveyance of title by statutory rules of descent. He would like you to make annual payments for 4 years, with the first payment to be . 5) In which provision would a landlord describe what activities can take place on the property? a) Use provisions b) Demising clause c) Description of premises d) Alienation clause. a) a 1 percent down payment. b) In a sublease, the original tenant retains primary responsibility for performance of the original lease contract. _____ loans are short term loans made to customers which require you to write a check today that is postdated o Payday The most common . b) neither an instrument of conveyance nor contract. d) Wait a statutory period before they may take legal action. 7) Money that the buyer or seller receives at closing is called what? These loans typically charge monthly interest based on a fixed rate. Choose Your Term. Accessed July 15, 2021. 2) Fred reclaimed a foreclosed property by paying off owed amounts, including interest and costs? the payment amount per dollar of loan amount for a fully amortized loan. a) requires recording of a leasehold conveyance. Mortgagors pay more toward interest in the initial stages of repayment; later on, their payments are going more into the loan principal. Chapter 6 Finance Midterm 1 Flashcards | Quizlet b) The leased property is foreclosed. 7) Jim holds a commercial lease. e. a) Retail Level Lease b) Percentage Lease c) Reorder Lease d) Market Level Lease. Under the Lien Theory, the borrower holds legal title to the pledged property and the lender holds a Select one: A. conditional title Balloon Payment Loan Balloon payment loans are partially amortized loans. AMORTIZATION. a) The lender calculates what's owed and tells the buyer what to bring. 6) Broker Sara completes a preprinted sales contract. Paul is most likely holding what kind of loan? The PR can be thought of as the opposite of the PW$1/P which was discussed in Lesson 6; mathematically, the PR and the A fixed-rate amortizing mortgage loan requires a basis amortization schedule to be generated by the lender. You can learn more about the standards we follow in producing accurate, unbiased content in our. But you can also Study with Quizlet and memorize flashcards containing terms like Ralph places a mortgage of $140,000 to buy his house. Thus, investors can expect to have varying payment amounts rather than the consistent payments with a fixed-rate loan. a) All parties to the contact must sign the changes. c) have more forms than government-backed loans. John borrows $75,000 at an annual rate of 6%, repayable in equal annual payments at the end of each of the next 10 years. Amortizing Loan Calculator - Lutheran Church Extension Fund Someone with a 15-year term, for example, will pay less in interest than someone with a 30-year fixed-rate mortgage. b) It requires certain conveyance-related contracts to be in writing. b) A borrower can get a conventional loan with a lower down payment by insuring the loan through private mortgage insurance. a) Hold Over Mortgage b) Advanced Mortgage c) Principal Mortgage d) Purchase Money Mortgage. 10) Buyer Rich has asked Seller Sally to hold $15,000 as a second mortgage. How will they know how much money they will receive from the sale? a) Right of first refusal b) First right to buy c) Right to resend d) Right to counteroffer. In the United States, terms can range anywhere from 10 to 30 years for fixed-rate mortgages; 10, 15, 20, and 30 years are the usual increments. a) A borrower can reduce monthly interest rate payments over the life of the loan by getting private mortgage insurance. b) intended contract. A loan amortization schedule gives you the most basic information about your loan and how you'll repay it. Lenders are making higher profits on their fixed-rate mortgages than they would if they were to issue fixed-rate mortgages in the current environment. Amortization schedules can be slightly more complex with these loans, since rates for a portion of the loan are variable. Ch 6 Financing. d) closing insurance. Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, insurance portfolio management, finance and accounting, personal investment and financial planning advice, and development of educational materials about life insurance and annuities. Finance Exam 2 Loan Amortization Flashcards | Quizlet the entire term of a loan. Example 3: 14) In an effort to make it possible for veterans returning from World War II to purchase a home, the Veterans Administration offered the opportunity for veterans to purchase a home with. b) All parties to the contact must initial the changes. a) The lender makes payments to the borrower. Meaning, Barry paid $330,000 in interest over the life of the loan. C. 400,000. b) She can fill out the contract but she cannot collect the earnest money deposit. ", a) A tenant's requirement to comply with contract obligations b) A landlord's obligation to provide the tenant with egress c) A landlord's obligation to provide the tenant with reasonable privacy and freedom from interference d) A tenant's requirement to allow access for inspections and repairs. a) A certificate issued by a local building department that indicates that the building is in proper condition to be occupied. in which the present worth of the payments is equal to $1, assuming payments occur at the end of each period. a) Attachment b) Covenant c) Bond d) Bill. The principal is repaid in equal increments and included in each loan payment. d) It can be created only by an attorney. a) Preservation and Repair of Property b) Preservation and Maintenance of Property c) Property Order d) Borrower's Duties. b) A borrower can get a conventional loan with a lower down payment by insuring the loan through private mortgage insurance. An adjustable-rate mortgage (ARM) is a home loan with a variable interest rate thats tied to a specific benchmark. to amortize a loan, you must know. In a fully-amortized loan, each payment is part interest and part repayment of principal. c) A sublease does not convey any of the leasehold interest. They have the right to review the completed settlement statement how long before closing? c) The broker finds out from the lender and tells the buyer how much to bring. d) A sublease conveys the entire leasehold interest. 6) Which legal remedy resets parties to pre-contract status? This allows a lender to create a payment schedule with constant payments over the life of the loan. a) Revision b) Reorder c) Rescission d) Refile. a) Fee for clearing the title b) Mortgage recording fee c) Homeowner's insurance d) Title search. d) provide a fixed interest rate for the life of the loan. 15) The loan origination fee on a VA loan cannot exceed. c) when the loan-to-value ratio reaches 78 percent. 8) Which of the following summarizes the general terms of a ground lease? Ch. 12 - Financing: Loan Types Flashcards | Quizlet c) when the loan-to-value ratio reaches 78 percent. c) The escrow agent will subtract the seller_s total debits from the total credits and arrive at what the seller will receive at closing. We also reference original research from other reputable publishers where appropriate. PW$1/P factors are reciprocals as shown below: Conceptually, the PW$1/P factor provides the present value of a future series of periodic payments of $1, a) voidable. a) Revolving Lease b) Wholesale Lease c) Index Lease d) Leading Indicator Lease. in excel the function would be: =PMT (5%,4,-17000,,) You need $17,000 to purchase a used car. 60%. 2) According to contract law, every valid contract is also what? 1) In the event of default by the purchaser, the lender has the right to bring legal action through the courts to satisfy the debt. d) Tim and Laura have not acted in good faith; so they cannot get their earnest money back. How much money for monthly payment? c) The maximum purchase price of the property cannot exceed $250,000. a) A listing agreement b) A personal services agreement c) A sale contract d) An option to buy. The annual interest rate is 8%. a) Marketable title b) Abstract of title c) Evidence of title d) Title commitment. b) after 5 years of loan payments. When you take out a loan with a fixed. Furthermore, despite faster payoff, the CN loan incurs MORE interest- 23.1% of face value- vs. only 16.7%. d) provide a fixed interest rate for the life of the loan. a) Attachment b) Covenant of seisin c) Promissory Note d) Defeasance clause. A home mortgage is a loan given by a bank, mortgage company, or other financial institution for the purchase of a primary or investment residence. Amortizedfixed-rate mortgage loans are among the most common types of mortgages offered by lenders. a) Accounts Payable b) Summary Balance c) Accounts Receivables d) Impound AccountD. These risks are usually centered around the interest rate environment. During this interim period, Grant makes monthly rent payments and the owner accepts them. d) estates from period to period. b) The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. a) Mortgage Company b) Local HUD Office c) Savings and Loan Association d) Commercial Bank. 1) Proof of ownership of a property is called what? You can easily calculate an amortization schedule with a fixed-rate interest when a loan is issued. 1) Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. 8) PMI loans made after July 1999 require that the loan must be released. This means that the monthly payments are not large enough to fully amortize the loan by the end of the term, leaving the large balloon payment due. payment that is principal repayment provides the lender a return of the investment. this is the most common type of financing. a) Credit b) Proration c) Debit d) Reimbursement. b) are less flexible than government-backed loans . 4) In which contract provision would the length of the lease be outlined? While the interest rate on the mortgage and the amounts of the monthly payments themselves dont change, the way that your money is applied does. b) every three years. a) Executory b) Lateral c) Executed d) Open Option, 2) A patron at a restaurant is agreeing to a(n). c) A borrower can request the cancellation of PMI payments when the equity reaches 20% of the purchase price. In an amortized loan, the portion of the payment that is interest provides the lender a return on the investment, and the portion of the b) executable. 1) Broker Norm prints and completes lease agreements to which he is not a party. b) The bundle of rights linked to the recorded title to a parcel. From the standpoint of the lender, a loan is an investment. a) Fire b) Flood c) Theft d) Explosion. The $20,000 is what type of mortgage? Amortization schedules are useful because interest and principal repayment may be treated differently for income tax purposes and it is necessary to keep track of the separate amounts for each. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. d) the Standards and Poor's Trust. c) It nullifies oral leases and listing agreements. b) a 3 percent down payment. a) He has provided an advance order of moving. b) It could be a violation of state licensing laws. types of loan Flashcards | Quizlet 7) Which kind of lease increases at specified intervals? b) contain default penalties. Answer: Credit buyer $110,000; debit seller $110,000. a) a survey of the property. a) covers more than one piece of property. Of course, borrowers can refinance their fixed-rate mortgages at prevailing rates if those rates are lower, but they have to pay significant fees to do so. a) They can cancel the contract and get their earnest money refunded. contract rate of interest. c) A borrower can request the cancellation of PMI payments when the equity reaches 20% of the purchase price. b) A certificate issued by a HUD that indicates that the building is in proper condition to be occupied. d) Interest is based on a selected economic indicator index. a) both an instrument of conveyance and a contract. d) The Torrens registry retains the original registration documents and provides copies to the recorder or other appropriate office. a) Graduated b) Gross c) Percentage d) Net. B. a) The borrower must occupy the property. Graduated payment mortgage-- allows for smaller payments in the early years and increased payments in the later years. a) A borrower cannot qualify for a conventional loan unless he or she can make a 20% down payment. Of all the term options, the most popular is 30 years, followed by 15 years. b) A tenant buys the landlord's ground, then leases the improvements. 300,000. d) The original offer is legally terminated. The small initial payments were appealing to homebuyers looking for affordable mortgages. 7) A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. 8) What is used to seal a binder agreement? Interest is then deferred and added to a lump sum balloon payment at the end of the loan. first year is $75,000 0.06 = $4,500. b) It is necessary to search public records to ascertain the status of title. a) It invalidates certain oral contracts. The first step is to calculate the payment amount: The remaining balance of an amortizing loan is the present value of the loans remaining payments discounted at the loans a) The buyer may not revoke the offer in such a short period of time. A. increasing payments paid for a definitive period of time b. increasing payments paid forever c. equal payments paid at regular intervals over a stated period of time What is your monthly payment of principal and interest? periodic payments will pay off the loan. This is called by what name? 7) Which of the following is not an item that a buyer usually pays at closing? a) Designed to promote ethics training among lawyers b) Allows lawyers to deposit earnest monies into a State wide account c) Provides a fund for loans to lawyers for professional development d) Designed for law clients who are unable to get reimbursement from their lawyer who has caused them loss, 5) In New York, the practice of law by a non-attorney is. d) allowance contract. After 20 years the account would be empty. b) All the parties must initial the changes. A fixed-rate mortgage is a home loan with a fixed interest rate for the entire term of the loan. Amortizing Loan - Overview, How It Works, Loan Types
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