Champions Real Estate Finance Actual Exam 2024 Questions and Answers
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Course
Champions Real Estate
Institution
Champions Real Estate
Loan-to-Value Ratio (LTV)
ANS The percentage of the lesser of the appraised value 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 to 80% of the
sales price or appraised value, whichever is lower.
2. Package Mortgage
...
Champions Real Estate Finance.pdf file:///C:/Users/HP/Desktop/NIW/Champions%20Real%20Estate%20
Champions Real Estate Finance Exam
1. Loan-to-Value Ratio (LTV)
ANS The percentage of the lesser of the appraised value 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 to 80% of the
sales price or appraised value, whichever is lower.
2. Package Mortgage
ANS Includes both real and personal property ( fixtures and furnishings)
3. Blanket Mortgage
ANS Covers more than one piece of property.
4. Wraparound Mortgage
ANS Method of financing which preserves the low, existing interest rate on the original note.
5. Open-End Mortgage
ANS Permits additional borrowing on the same note. This is sometimes called a credit card
mortgage or a home equity line of credit - HELOC.
6. Budget Mortgage
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ANS The monthly house payment includes principal, interest, taxes and insurance (known as
PITI)
7. Collateral -Dependent Loans
ANS A hard money loan is a specific type of as-
set-based financing in which a borrower receives funds secured by the value of a parcel of real
estate.
8. Character
ANS Is a measure of the willingness of a borrower to make on-time pay- ments. Credit
character is revealed in the borrower's credit report.
9. Capacity
ANS Is a measure of the borrower's ability to repay the debt, and is demon- strated through
current earnings and job stability.
10. Capital
ANS Is the sum of all assets that the borrower has accumulated.
11. Collateral
ANS Is something of value that can be pledged as security for repayment.
12. Yield
ANS Is the return that the investor recieves over the life of the loan. (Also known as profit)
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13. Originator
ANS The process of creating a new mortgage loan, including all steps taken by a lender to
attract and qualify a borrower.
14. Mortgage Broker
ANS Typically functions as a middleman between the borrower and the lender, negotiating,
selling or arranging loans to be delivered to larger investors. At one time originated up to 80%
of all mortgage loans. (Back on the rise)
15. Mortgage Banker
ANS Entities which provide their own funds for the purpose of pro- viding mortgage financing, as
opposed to commercial banks/savings associations. (Held, or "Warehoused")
16. Correspondent Lender
ANS Usually smaller in scale than mortgage bankers or brokers, these lenders typically extend
loans with their own funds, at their own risk.
17. Processing
ANS Once application is complete the file moves into this phase.
18. Underwriting
ANS The detailed process of evaluating a borrower's loan application to determine the risk
involved for the lender.
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19. Closing
ANS The consummation of a real estate transaction in which all appropriate documents are
signed and the proceeds of the mortgage loan are then disbursed by the lender.
20. Servicing
ANS Includes collecting monthly payments, maintaining records of pay- ments and balances,
collecting and paying taxes and insurance ( and managing escrow and impound funds)
remitting funds to the note holder, and following up on delinquencies.
21. Supply and Demand
ANS an economic concept that states that the price of a good rises and falls depending on how
many people want it and depending on how much of the good is available.
22. Funding
ANS The process of transferring funds to a title or escrow company for disbursement
23. The Safe Act
ANS Designed to enhance consumer protection and reduce fraud.(Key component of HERA)
24. M1
ANS Is defined as the sum of currency held by the public and transaction deposits at depository
institutions.
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