real estate 306; Questions and Answers 100% Correct
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Module
Real Estate 306
Institution
Real Estate 306
real estate 306; Questions and Answers 100%
Correct
Foreclosure Correct answer--The action of taking possession of a mortgaged property
when the mortgagor fails to keep-up their mortgage payments
Lien Correct answer--The right to take hold or sell the property of a debtor as security or
pay...
real estate 306; Questions and Answers 100%
Correct
Foreclosure Correct answer--The action of taking possession of a mortgaged property
when the mortgagor fails to keep-up their mortgage payments
Lien Correct answer--The right to take hold or sell the property of a debtor as security or
payment for a debt, mortgage.
- right to use property as collateral
Term Sheet Correct answer-A non-binding financing commitment.
Credit Committee Correct answer-A loan committee that consists of upper management
of a lending institution with the authority to approve loans that the initial loan officer does not
have the authority to approve.
special purpose entity (SPE) Correct answer--An entity created for a specific purpose such
as a Limited Liability Company (LLC) or Limited Partnership (LP).
- interest or shares in the LLC/LP is what is sold to investors when they invest in a deal
Operating Agreement Correct answer-identifies the relationship between
investors/owners/developer in a a deal and spells out their percentage ownership and any
rights and responsibilities and profit splits
mortgage Correct answer--a specific type of loan that is used to buy real estate
, real estate 306; Questions and Answers 100%
Correct
- borrower agrees to pay the lender overtime in installed payments and divided into principal
and interest
note Correct answer--binds the borrower to repay the mortgage within an agreed period
and outlines the terms of the loan
-establishes interest rate
guaranty Correct answer-Promise by a third-party entity, or individual, to pay or perform
the obligations of the borrower.
amortization Correct answer--the reduction of a loan balance through payments (paying
off the principal) made over a period of time
term Correct answer-he amount of time during which a borrower repays a loan if fully
amortizing, or until the outstanding loan balance, or balloon payment, is due if non-amortizing
(i.e., interest only) or partiallyamortizing.
principal Correct answer--The amount of money borrowed
- the return OF capital to the bank after amortization
intrest rate Correct answer--the percentage of a sum of money charged for its use
- return on capital for the bank after amortization
, real estate 306; Questions and Answers 100%
Correct
-index rate+ margin
index Correct answer-- benchmark interest rate that reflects the general market
conditions
- a widely available quoted rate
margin Correct answer-the portion of the interest rate for a commercial teal estate loan
that represents the lenders premium for the risk they are taking loaning the money
loan to value (LTV) Correct answer--Ratio between property's value and the amount lent
on it.
- LTV and risk and inversely related
Debt Service Coverage Ratio Correct answer--A measure of the cash flow available to pay
current debt obligations
-NOI/ total debt service
Debt Service Correct answer-Payments for the principal and interest owed on a loan for
that period.
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