Untitled Flashcards Set

Conventional Mortgages

Mortgage loans that have no government insurance or guarantee, offered by mortgage bankers and depository institutions.

Insured Conventional Mortgages

Conventional loans that include some form of mortgage insurance when the loan amount exceeds 80% LTV.

FHA Insured Mortgages

Loans insured by the Federal Housing Administration, covering the entire loan amount and requiring up-front insurance premiums.

VA Guaranteed Mortgage Loans

Mortgage loans backed by the Department of Veteran Affairs, allowing very low or zero down payments.

Title Insurance

Insurance that protects against ownership title problems in real estate transactions, covering issues like unpaid taxes and fraud.

Closing Statement

A document summarizing the financial details of a real estate transaction and the associated costs.

Prorated Closing Costs

Expenses split between buyer and seller based on the duration of property ownership during the billing period.

Truth-in-Lending (FTL) Requirements

Legislation requiring lenders to disclose key financial information in mortgage agreements for easier borrower comparison.

Default Insurance

Insurance purchased by borrowers to protect lenders from losses if the borrower defaults on the loan.

Conforming Loan

A mortgage loan that meets the requirements set by government-sponsored enterprises like Fannie Mae and Freddie Mac.

Jumbo Loan

A non-conforming loan that exceeds the maximum loan limits set by government agencies, typically with higher interest rates.

Escrow

An account where monthly payments for property taxes and insurance are collected and held until needed.

Payment-to-Income Ratio

A measure of a borrower's monthly loan payment plus housing expenses divided by their income.

Loan-to-Value Ratio

The ratio of the loan amount requested to the estimated value of the property.

Closing Costs

Fees and expenses associated with finalizing a mortgage loan including appraisal, title search, and insurance.

Mortgage Insurance Premium

Insurance premium paid on loans with higher LTV ratios to protect lenders from default.

Discount Points

Fees paid to lower the interest rate on a mortgage, often expressed as a percentage of the loan amount.

Appraisal Fee

Fee charged for an independent evaluation of the property's value.

Title Search Fee

Cost for investigating the property's title history to ensure it is clear of encumbrances.

Homeowners Insurance

Insurance protecting against risks such as theft, fire, and water damage on a home.

Property Taxes

Taxes assessed on real estate properties, typically collected by the local government.

Recording Fee

Charge for recording the mortgage and property documents with the local government.

Transfer Tax

Tax imposed on the transfer of property ownership.

Prepaid Interest

Interest that is paid in advance at closing for the period until the first mortgage payment is due.

Title Insurance Policy (Owners Policy)

Insurance policy that protects the property owner against title defects.

Hazard Insurance

Insurance coverage for damages to a property due to fire, storms, or other hazards.

Survey Fee

Fee charged for determining the boundaries and dimensions of a property.

Pest Inspection

An evaluation conducted to check for wood-destroying insects and organisms.

Attorney Fees

Costs incurred for legal representation during the closing process.

Variable Rate

An interest rate on a loan that can fluctuate based on market conditions.

Assumption Policy

Terms under which a buyer can take over the seller's mortgage payments.