Ree 3043 TEST QUESTIONS WITH CERTIFIED ANSWERS
When existing loans are sold by originators to investors or from one investor to another, these transactions are the secondary mortgage market. - Answer-Secondary mortgage market
The value of money changes over time - Answer-Time value of money
...
Ree 3043 TEST QUESTIONS WITH
CERTIFIED ANSWERS
When existing loans are sold by originators to investors or from one investor to another,
these transactions are the secondary mortgage market. - Answer-Secondary mortgage
market
The value of money changes over time - Answer-Time value of money
Earning may not be there, could lose your principle, liquidity risk ( it is not easily
converted into cash ) - Answer-Financial risks
Present value of your cash inflows minus the present value of your cash outflows Or
difference between cost and value, must know your required rate of return when using
the NPV analysis - Answer-NPV ( Net Present Value )
That discount rate that equates the value of the cash outflows and cash inflows to $0.00
- Answer-IRR ( Internal Rate of Return )
Document that has the positive and negatives of investing in a property. Used for
regulations ( Reg. ) D Underwritings - Answer-PPM ( Private Placement Memorandum )
Periodic payments are sufficient to pay off the full amount of the loan plus all of the
interest by the end of the term.
- was a common type of mortgage until a few years ago. Starting to come back now. -
Answer-Fully amortizing loan
You pay only the interest on the loan for the entire loan and then pay the principle at the
end of the loan. - Answer-Interest only loan
The lender that takes out a insurance policy against the mortgage in case the borrower
defaults. - Answer-PMI - Private Mortgage Insurance
It was created to restore confidence in the mortgage market. It had a great impact in the
housing finance system. The FHA helped establish rigorous borrowing and lending
standards that reduced lenders' risk and promoted the use of long term, fully amortizing
loans that were more consistent with the household budgets than the interest-only loans
that were prevalent at the time. - Answer-Federal housing administration ( FHA )
It allowed veterans to obtain mortgage loans for home purchases with little or no down
payment and low interest rates. The VA loan program guarantees the payment of a
mortgage loan made by a private lender to a qualified veteran should the borrower
default. - Answer-VA- guaranteed loans
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