REAL ESTATE CHAPTER 13 TERMS

A variable-rate mortgage, ___ ___ ___ ___ , or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.

An ___ ___ payment pays the relevant interest expense for the period before any principal is paid and reduced.

A ___ ___ mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity. The final payment is called a ___ ___ because of its large size. ___ ___ mortgages are more common in commercial real estate than in residential real estate.

A mortgage payment plan where payments are made every two weeks, as opposed to the more traditional monthly payment plan.

A mortgage that is equal to or less than the dollar amount established by the ___ ___ limit set by Fannie Mae and Freddie Mac's Federal regulator, The Office of Federal Housing Enterprise Oversight (OFHEO) and meets the funding criteria of Freddie Mac and Fannie Mae.

___ occurs when potential lenders and borrowers interact more directly in the capital markets, avoiding the intermediation of banks.

is a type of loan in which the borrower uses the equity of his or her home as collateral. ... ___ ___ ___ are often used to finance major expenses such as home repairs, medical bills, or college education.

A House Price ___ (HPI) measures the price changes of residential housing.

Intermediation involves the "matching" of lenders with savings to borrowers who need money by an agent or third party, such as a bank

A type of mortgage that requires the same dollar payment each month or payment period. ___ ___ ___ allow borrowers to know exactly how much they will have to pay on their mortgages each pay period.

A limit on the amount that the payments of an adjustable rate mortgage can increase or decrease during the mortgage term.

deposit an amount of money with a broker as security for (an account or transaction).

is an intermediary working with a borrower and a lender while qualifying the borrower for a mortgage. The ___ ___ gathers income, asset and employment documentation, a credit report and other information for assessing the borrower's ability to secure financing.

is a crime in which the intent is to materially misrepresent or omit information on a mortgage loan application in order to obtain a loan or to obtain a larger loan than could have been obtained had the lender or borrower known the truth.

is paid if you as a borrower were to make a down payment of less than 20 percent on your home loan. It is paid by you, but is used to protect the lender from losses if you were to default on the loan.

under the SAFE Act is an individual who: 1) takes a residential mortgage loan application; and 2) offers or negotiates the terms of a mortgage loan in exchange for compensation or gain.

is an increase in the principal balance of a loan caused by making payments that fail to cover the interest due. The remaining amount of interest owed is added to the loan's principal, which ultimately causes the borrower to owe more money.

is a loan that fails to meet bank criteria for funding. Reasons include the loan amount is higher than the conforming loan limit (for mortgage loans), lack of sufficient credit, the unorthodox nature of the use of funds, or the collateral backing it.

is a loan secured by real estate and in which the personal property and furniture is included in the purchase price of the house. ... The personal property is used as collateral, and cannot be sold without the approval of the lender.

is a special type of liability or obligation that involves partial amortization during the loan term and a balloon payment

limits the increase in your monthly payment to a specific dollar amount. ... there is either an annual interest rate cap or an annual ___ ___ to sheild the borrower from excessive annual increases in monthly mortgage payment.

limits the amount by which the interest rate on an adjustable rate loan can adjust at specified adjustment dates.

a sum of money lent or invested on which interest is paid.

is a mortgage issued to the borrower by the seller of a home as part of the purchase transaction. Also known a seller or owner financing, this is usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels.

a type of home mortgage under which an elderly homeowner is allowed a long-term loan in the form of monthly payments against his or her paid-off equity as collateral, repayable when the home is eventually sold.

is a low, adjustable introductory interest rate advertised for a loan, credit card, or deposit account in order to attract potential customers to obtain the service. The ___ ___ are normally too good to be true for the long term, and are far below the common realistic rate for the service.

It is in contrast to private mortgage insurance (PMI), which is collected by the lender each month when a buyer's down payment is less than 20% of the purchase price.__ ___ ___ ___ are added to a pool of money that is used to help entities, such as the FHA, insure loans for certain borrowers.