100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Gold Coast Chapter 13 Key Terms (100% CORRECT) $7.99
Add to cart
Quickly navigate to
Preview
  2.  
  3. Gold Coast
  4.  
  5. Gold Coast

Exam (elaborations)

Gold Coast Chapter 13 Key Terms (100% CORRECT)
 0 purchase
  • Course
  • Gold Coast
  • Institution
  • Gold Coast

Adjustable Rate Mortgage (ARM) - Correct Answer Amortized loan where interest rate fluctuates. 2 important elements: Index (foundation rate for loan that must be published and is beyond control of the lender) and margin (% added to index rate by lender to cover lender's overhead and provide profit...

[Show more]

Preview 2 out of 5  pages

Document information

  • August 7, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • adjustable rate mortgage arm amortized loan wher
  • amortized loan loan with scheduled payments with a
  • balloon payment principal amount borrowed repaid i
  • biweekly mortgage requires that one half of mortg

Written for

  • Gold Coast
  • Gold Coast

Seller

avatar-seller
Victoria108

Reviews received

Content preview

Gold Coast Chapter 13 Key Terms (100% CORRECT)
Adjustable Rate Mortgage (ARM) - Correct Answer Amortized loan where interest rate fluctuates. 2
important elements: Index (foundation rate for loan that must be published and is beyond control of the
lender) and margin (% added to index rate by lender to cover lender's overhead and provide profit on a
loan. Margin does not change for life of the loan. Fed law requires lender to lower rate when index goes
down).



Amortized loan - Correct Answer Loan with scheduled payments with a portion towards principal. Fully
amortizing means payment is sufficient to repay interest owed and loan amount in full over life of the
loan.



Balloon payment - Correct Answer Principal amount borrowed repaid in lump sum payment called
balloon payment at the end of a term of a term mortgage



Biweekly mortgage - Correct Answer Requires that one half of mortgage payment be paid every 2 weeks
instead of once a month. By doing this, a loan can be paid off in 21 years instead of 30 years.



Blanket mortgage - Correct Answer Single mortgage given by a borrower that pledges two or more
parcels as security for the loan



Conventional mortgage loan - Correct Answer Loan that is not insured or guaranteed by an agency of
the government. More difficult for borrower to obtain than under FHA or VA, have higher interest rates.
PMI required when loan amount exceeds 80% of value of property. PMI automatically cancelled when
LTV ratio 78% or less than property's original value.



Conforming loan - Correct Answer a standardized conventional loan written on uniform documents that
meets the purchase requirements of Fannie Mae and Freddie Mac - both loan amount and borrower
characteristics must meet the guidelines



chattel mortgage - Correct Answer uses only personal property as security for the loan



Disintermediation - Correct Answer Occurs when depositors bypass traditional depository institutions
and withdraw from accounts with low fixed interest rates, transferring funds to other investments with
higher interest yields, such as the stock market.

, Home equity loan - Correct Answer Loan secured by equity in the home. Commonly used to finance
home remodeling.



FHA section 203(b) mortgage insurance - Correct Answer 1. FHA section 203(b) mortgage insurance
provides basic mortgage insurance for the purchase of a 1-4 family property. Loan amount is limited,
with a downpayment of at least 3.5%. Standard LTV ratio is 96.5%. Housing expense ratio of 31% and
total obligations ratio of 43%. Interest rates determined via negotiation by lender and borrower.
Borrower has right of prepayment without penalty. Max loan term of 30 years at a fixed rate. An
appraisal paid for by the buyer is required to make sure property meets certain standards.



FHA section 203(k) rehabilitation mortgage insurance - Correct Answer Enables homebuyers to finance a
home plus cost of its rehabilitation through single long term mortgage. The value of the property is
determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation or
(2) 110% (LTV) of the appraised value of the property after rehabilitation, whichever is less.



FHA Section 234(c) Condominiums - Correct Answer Insures a loan for 30 years for purchase of a single-
unit condo



FHA section 251 Adjustable rate mortgages - Correct Answer 1,3, and 5 year ARM loans are available
with interest rates that cannot change by more than 1% per year after fixed rate period, with max rate
increase of no more than 5%. 7, 10 year loan rates cannot change more than 2% per year, no more than
6% over life of loan.



Federal Reserve System - Correct Answer central bank established by Congress in 1913 to give the
country an elastic currency, provide a system for discounting commercial paper, and to improve the
supervision of the banking industry. It is made up of regional banks that are managed by a Board of
Governors.



Calculating interest portion for loan payment - Correct Answer I = P x R x T



I = interest portion

P = principal portion

R = interest rate

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Victoria108. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

67479 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$7.99
  • (0)
Add to cart
Added