Illinois PSI Real Estate Exam with complete solutions.

Illinois PSI Real Estate Exam with complete solutions. acceleration clause ️ A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender. adjustable-rate mortgage (ARM) ️ A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes. adjustment date ️ The date the interest rate changes on an adjustable-rate mortgage Amortization ️ The loan payment consists of a portion which will be applied to pay the accruing interest on a loan, with the remainder being applied to the principal. Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid off (amortized) in the specified time. amortization schedule ️ A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero. annual percentage rate (APR) ️ This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. You will come up with a number close to the APR. Because you are using the same payment on a smaller amount, the APR is always higher than the actual not rate on your loan. application ️ The form used to apply for a mortgage loan, containing information about a borrower's income, savings, assets, debts, and more. appraisal ️ An estimate of the current value of the property. appraised value ️ opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price. appraiser ️ An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work appreciation ️ increase in the value of a property due to changes in market conditions, inflation, or other causes. assessed value ️ The valuation placed on property by a public tax assessor for purposes of taxation assessment ️ The placing of a value on property for the purpose of taxation. assessor ️ public official who establishes the value of a property for taxation purposes. asset ️ Items of value owned