Exam (elaborations)
Champions School of Real Estate: Real Estate Finance: Q&A
Champions School of Real Estate: Real Estate Finance: Q&A
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Champions School of Real Estate: RealEstate Finance: Q&A
VA Loan Requirements Correct Ans - Veterans who were honorably
discharged AND who meet the service requirements are eligible for VA home
loan benefits. Eligibility is additionally determined by the time frame in which
the veteran served and the number of days of active duty. The veteran must
obtain a certificate of eligibility (COE).
Origination Correct Ans - The process of creating a new mortgage loan,
including all steps taken by a lender to attract and qualify a borrower,
Mortgage Broker Correct Ans - Typically functions as a middleman
between the borrower and the lender, negotiating, selling, or arranging loans
to be delivered to larger investors.
Mortgage Banker Correct Ans - Entities that provide their funds to
provide mortgage financing, as opposed to commercial banks/savings
associations.
Correspondent Lender Correct Ans - Usually smaller in scale than
mortgage bankers or brokers, these lend- ers typically extend loans with their
funds, at their own risk.
Processing Correct Ans - Once the application is complete, the file
moves into the _____________ phase.
"build a file" that will be used to make an underwriting decision
Application information verification
Collect information on the borrower and the property including Credit reports
Underwriting Correct Ans - The detailed process of evaluating a
borrower's loan application to determine the risk involved for the lender is
defined as underwriting.
•in-depth analysis of the borrower's credit history
•examination of the value and quality of the subject property
, •reviewed by a well trained professional who analyzes the creditworthiness
of the borrower and renders a decision on the loan request
Closing Correct Ans - The consummation of a contractual real estate
transaction in which all appropriate documents are signed, and the proceeds
of the mortgage loan are then disbursed by the lender
Funding Correct Ans - The process of transferring funds to a title or
escrow company for disbursement
Servicing Correct Ans - Collecting monthly payments, maintaining
records of payments 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
????? Correct Ans - 3. VA loan terminology - guaranteed, qualification,
eligibility, entitlement - page 195
Secondary Mortgage Market Correct Ans - exists for the purchase &
sale of existing mortgages to investors. It is designed to provide greater
liquidity to the residential real estate market by providing for a steady supply
of funds from investors.
•loan originators can sell their loans and thus recover cash for originating
more loans
•not for lending money
•mortgage notes are purchased as investments to earn a return, called a yield
Primary Mortgage Market Correct Ans - where borrowers and
mortgage lenders come together to create and negotiate terms of a mortgage
transaction
Front End Ratio Correct Ans - used to qualify a borrower for a loan
based upon the proposed house payment and his or her gross monthly income
(GMI). The house payment is the monthly payment of principal, interest, taxes,
and insurance (PITI). In conventional lending, a front ratio of 28% means that
the house payment (PITI) cannot exceed 28% of the borrower's gross monthly
income.
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