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Construction loan
the type of loan to build a house, short term loan
What are some of the things that a borrower is looking at for a loan application?
personal information (name, age, sex, etc.) credit, income, debts, employment, address, married/not.
Deed of Trust
a legal document used to secure a loan for a property, involving three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party (trustee) who holds the property's title. It differs from a mortgage, which only involves the borrower and lender.
How long does it take to close a residential loan?
30 days
Ad Valorem
Taxes that are leveled according to/based on property value. These are the primary source of income for local governments.
What do taxes pay for?
Schools, roads, government, etc.
Fair Credit Reporting Act
A federal law that promotes the accuracy, fairness, and privacy of consumer credit report information. It gives consumers the right to access their credit reports, dispute errors, and restricts who can access their information to "permissible purposes" like credit, employment, or insurance.
Loan To Value
The relationship between the amount of money a lender is willing to loan and the lender’s estimate of the market value of the property that will serve as security.
market value = $100,000 (e.g. appraised value) loan = $80,000 • What is the loan-to-value ratio? $80,000/$100,000 = 80%
Acceleration Clause
Used to permit the lender to demand the balance be paid in full immediately.
PITI
In addition to collecting the monthly principal and interest payment (PI like an amortized loan), the lender collects one-twelfth of the estimated cost of the annual property taxes and hazard insurance on the mortgaged property (referred to as escrow (TI). Therefore, each payment includes principal, interest, taxes and insurance.
Truth in Lending protects who?
Consumers/Buyers
Index
What to look for in an ARM promissory note?
the interest rate and adjustment (%), the lender’s margin (%) added to the/an:
Jumbo Loan
A big loan. a mortgage that exceeds the maximum loan limit set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac, making it a non-conforming loan that cannot be sold through standard secondary markets.
A second mortgage is a what?
Junior Mortgage
Assignment of Rents
The right to collect rent.
Does a VA loan require a down payment?
No
What do we do in a secondary market?
Buy it or sell it, it's the same thing with stocks/bonds.
Which account holds the taxes and the insurance?
the escrow account
A walk-through
a final walk-through of the property just prior to closing to make certain that everything is in good shape to sell.