Real Estate Financing Terms

These flashcards cover key concepts related to real estate financing, including various types of loans, insurance, and mortgage definitions.

Short Sale

A sale of property in which the sale proceeds are less than the balance owed on the property’s loan.

Deed in Lieu of Foreclosure

A process where the borrower gives the property to the lender and the lender cancels the debt.

Loan Qualifying

The process of determining the risk to the lender for making a loan.

LTVR (Loan to Value Ratio)

The loan amount divided by the value of the property.

Private Mortgage Insurance (PMI)

An insurance policy that covers the part of a loan that is above and beyond the standard 80%.

FHA Loan

A government-backed loan insured by the FHA in case of default.

VA Loan

A government-backed loan guaranteed for veterans, requiring no down payment.

Certificate of Eligibility

A document stating the amount of entitlement a veteran is eligible to receive on a VA loan.

Certificate of Reasonable Value (CRV)

States the market value of the property being purchased with a VA loan.

Discount Points

Pre-paid interest that gives the borrower a lower interest rate.

Blanket Mortgage

A loan secured by several properties.

Package Mortgage

A loan secured by both real and personal property.

Adjustable-Rate Mortgage

A loan in which the interest rate fluctuates according to an external index.

Reverse Mortgage

A type of loan where regular monthly payments are made to the borrower based on the equity in the property.

Wrap-Around Mortgage

A mortgage that includes an existing mortgage plus additional financing.

Notice to Vacate

A formal notice given to tenants indicating they must leave the property.