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Real Estate Finance AYPO questions with correct answers.
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Real Estate Finance AYPO questions with correct answers.
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Real Estate Finance AYPO questions with correctanswers
Real estate has been estimated to represent approximately Correct
Answer-one-half of the world's total economic wealth.
The buyer's ability to finance the property is an important, if not the
-------, contingency in most residential transactions, and a significant
driver in the entire real estate-based economy. Correct Answer-primary
Texas is a:
a. Lien Theory
b. Title Theory Correct Answer-a. Lien Theory
Lien Theory Correct Answer-In lien theory states such as Texas, the
security for a mortgage is a lien placed on the property, which is
removed once the loan is fully repaid. The title (or other legal instrument
documenting the rights and privileges of the holder of the title) is
actually held by the buyer/property owner. This makes foreclosure more
challenging than when the lender (as in a title theory state) or a third
party (as in a deed of trust) hold actual title. In all of these cases, the
buyer/property owner holds equitable title to the property.
Title Theory Correct Answer-In title theory states, the mortgage is
secured by the lender holding legal title to the property until the
mortgage is paid off. Again, the borrower holds "equitable" title to the
property which carries many, but not all, of the rights granted by the
,actual title. The full title is given to the borrower when the loan
obligation has been fully satisfied. Because the lender has the full title,
foreclosure on the property is easier than if the mortgage was only
secured by a lien, because the title does not need to be recovered from
the defaulting buyer.
Mortgages Correct Answer-While the loan is the money a lender
provides to buy the home, the mortgage and deed of trust are the
"instruments" that document the lender's actual interest in the property.
Amortization Correct Answer-paying off of debt with a fixed schedule
in regular installments over time, therefore, a fully amortized loan is one
that is paid back over the term of the loan (most frequently 15-, 20-, and
30-year periods) through a set number of equal payments.
promissory note Correct Answer-piece of the mortgage loan contract
committing the borrower to pay back the loaned money.
Second Mortgages Correct Answer-loan that is secured by a property
that is already collateral for another mortgage, generally a first
mortgage.
Type of Second Mortgages Often Issued Correct Answer--Home Equity
Loans
-Home Equity Line of Credit (HELOC
,Home Equity Loans Correct Answer-Home equity loans are standard
lump-sum loans that convert the equity of a house into usable funds.
Home Equity Line of Credit (HELOC Correct Answer-Almost like
Home Equity Loans-The difference is that home equity lines of credit
operate more like credit cards. Instead of a lump sum disbursement, the
borrower is allowed to use the line of credit whenever they desire.
Wraparound Mortgages Correct Answer-The wraparound loan, or a
"wrap," is a form of creative financing, that may or may not be allowed
with a homeowner's original loan. It is a secondary loan for real
property, that 'wraps around' the first loan, without paying it off.
Chattel Mortgages Correct Answer-A chattel mortgage is a mortgage
loan that is secured by some form of personal property that is not tied to
a piece of land. Like a standard mortgage loan, the borrower transfers
ownership of the personal property, like a car or boat, to the lender until
the loan is paid off.
Deeds of Trust Correct Answer-deed of trust includes a third-party
trustee. The role of the trustee alters the manner of dealing with a
default.-In the event of a default, the trustee has the right to sell the
property in order to cover the loan, or as much of it as they can get
through a sale. The power-of-sale rights vested in them allow the trustee
to foreclose on the property without going through formal proceedings
required for a judicial foreclosure.
, Power-of-Sale Correct Answer-The power-of-sale that is connected to a
deed of trust is regulated by legislation generally requiring notice to be
given regarding the sale. Because this type of sale is not approved
officially by a court, it does leave a slightly larger window for litigation
resulting from disagreements over the title.
Real Estate Cycles Correct Answer-The U.S. real estate market is said to
run in an 18-year cycle.
Real estate's unique role in the economic system Correct Answer-- A
presence in virtually all economic sectors, including financial
- A predominance of long-term, and often costly, financial commitments
- Home ownership's intrinsic ties to individual wealth, disposable
income, and employment
The Four-Phase Cycle Correct Answer-- Recovery
- Expansion
- Hyper supply
- Recession
Phase 1: Recovery Correct Answer-During this first phase of the cycle,
the market is no longer in decline, but now has begun to curve back
upward. This, generally, would be the best time for buyers, because
there is really only one real direction for the market to go: up! This
economic phase of the cycle usually comes with high (but stabilized)
unemployment, a higher number of foreclosures, and a lot of fear and
nervousness in the general economy. Most people will be wary and shy
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