Exam (elaborations)
R-305 Exam 2 Ch. 9 (1).
- Institution
- Chapter 5: Time Value Of Money
R-305 Exam 2 Ch. 9 (1).
[Show more]
Seller
Follow
Content preview
R-305 Exam 2 Ch. 9Note - ANS-defines the exact terms and conditions of a loan
Index Rate - ANS-market determined interest rate, "moving part" in an ARM
LIBOR Rate - ANS-short-term loan rate that banks charge each other, serves as first step in
determining interest rates on various loans
Margin - ANS-lender's markup, determined by each individual lender
Rate Caps - ANS-limitations to the changes in an ARM, either periodic or overall caps
Teaser Rates - ANS-a temporarily reduced interest rate, typically a percentage point or two
below sum of index plus margin
Payment Caps - ANS-does not let a borrower pay more than a certain percentage in a given
time frame, enables lender to enjoy the interest rate fluctuation
Partially Amortized - ANS-make payments for a certain number of years with one large balloon
payment at the end
Nonamortizing - ANS-require interest, but not regularly scheduled principal payment prior to last
payment
Term - ANS-definitive term to maturity, home loans typically 15 and 30 years
Subprime Loans - ANS-loans to homeowners who do not qualify for standard loans, costly
prepayment penalties and locked in high interest rates
Personal Liability - ANS-a borrower assumes liability when signing a note, if borrower does not
meet terms of the note, they are in default
Exculpatory Clause - ANS-clause in the note that can release the borrower from liability for
fulfillment of the contract
Nonrecourse Loans - ANS-loans with an exculpatory clause, release borrower from personal
liability but property is still up for collateral
Demand Clause - ANS-permits a lender to demand prepayment of a loan
Mortgagor - ANS-borrower, grantor of the mortgage claim
The benefits of buying summaries with Stuvia:
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
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
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 lydiaomutho. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for CA$11.53. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now