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59 Cards in this Set
- Front
- Back
- 3rd side (hint)
Contingency Clause |
If the buyer cannot get financing, the buyer may back out of the contract without penalty. |
Just because an offer is made does not mean that the buyer will beable to secure financing. |
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Prequalification |
This process normally looks at the buyer's income and asset information and determines the mortgage payment amount for which the buyer is likely to qualify. |
Does not involve a check of the borrower's credit or verification of income. |
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Preapproval |
For amore effective way to demonstrate the financial capacity of the buyer, the lender will get a credit report about the buyer and verify the buyer's income and assets |
Loan approval will then be issued, contingent on the future appraisal and market conditions. |
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Purchase Contract |
A copy of the accepted offer for the home being purchased. |
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Residence History |
Past two years, including contact information for the lender, landlord or rental agent. |
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Employment History |
For the past two years including W2's and copies of College transcripts if applicable should be available. If contract employee past two years of tax filings. |
Proof of income |
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Income History |
For the past two years, which include, paycheck stubs for the past 30 days, information about other sources, such as Social Security and disability. If self-employed copies of full tax returns . |
Information about alimony or child support payments received are only considered if applicant wants the income to be considered as part of the qualification process. |
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Asset Information |
Would include bank statements, 401K statements, valuation of personal property, vehicles owned (make, model, year), cash value of insurance policies, all real property owned, including outstanding mortgages. |
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Liability Information |
Would include contact and account information and monthly requirements for all creditors. If an applicant is paying child support or alimony payments, those will need to be disclosed as well. |
MLO should obtain copies of the applicant's credit report. |
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DD-214, Certificate of Eligibility, or discharge papers |
Required if the applicant is applying for a VA loan. |
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Copy of the sales contract |
If the applicant is selling a current residence or property, this should be made available. |
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Uniform Residential Loan Application |
Is the Freddie Mac form 65 and the Fannie Mae 1003. It is commonly referred to as a "10-03". |
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Forced Place Policy |
If the servicing agent (or the lender) places a hazard insurance policy on the property. |
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Prepaid Interest |
Equals number of days remaining in the month times daily rate found by Loan amount times interest percentage divided by 365 days |
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Agency Case Number |
Would be assigned by the FHA, VA, or RHS, but would be left blank for a conventional loan. |
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Servicing Transfer Statement |
At least 15 days prior to the effective date the lender must send. |
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Maximum Gross Adjustment |
Under Fannie Mae and Freddie Mac guidelines, ignoring whether the adjustment is positive or negative, the total to any one comparable sale cannot be more than 25%. |
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Loan Estimate |
Required by RESPA, the Real Estate Settlement Protection Act |
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Mortgage (or Trust Deed) |
Makes the property collateral for the debt. |
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Promissory Note |
Obligates the borrower to repay the loan. |
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Joint Tenancy |
Includes the right of survivorship, which means that upon the death of one party, title would automatically pass to the surviving joint tenant(s). While it is most commonly used between spouses, that is not a requirement. |
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Conventional Loan |
Would use a maximum Housing Ratio of 28% and total debt service of 36% of the household income. |
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Government Recording Charges |
Subject to the 10% error tolerance, and the initial deposit to the escrow account and the homeowners insurance premiums can change without any specific limitation. |
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Subject Property Appraisals |
Appraisers must report and consider any prior sales for 3 yrs prior to the date. |
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Comprable Properties |
Prior sales are reported and considered for one year after the date of the appraisal. |
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Maximum Net Adjustment |
(Does not ignore whetherthe adjustment is positive or negative) is 15% |
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Notice of Right to Appraisal Report |
Disclosure form is now incorporated into the Loan Estimate Form. |
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FHA Real Estate Certification |
Used to certify the terms of the purchase and must be signed by both the buyer and the seller. |
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Yeild Spread Premium |
The borrower might exchange a higher interest rate in return for lower closing costs. |
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Purchase Transaction |
An owner's policy of title insurance would most likely be found in this type of mortgage loan. |
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Transfer of Service Disclosure |
Is required by The Real Estate Settlement Procedures Act |
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Accrued Interest |
The amount of unpaid interest due to a lender since the last interest payment. |
If your mortgage payment is due on the first of each month, on the 15th of each month you would have one-half month of accrued interest. |
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Alienation Clause |
If the property is sold, the Loan must be repaid at the time of the sale. Also is called a "Due on Sale" clause, which is more descriptive. |
If a loan has this it is not an assumable loan. |
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Alt-A Loans |
Werr initially designed for people who would have qualified under normal standards, except that they were deficient in one are, such as perhaps an inability to fully document their income, and so the loan was granted on the basis of "stated income", where the requirement to document the income was reduced or waived. |
Sometimes appropriate for recently divorced, entrepreneurs, the self employed and those who are paid on commission. |
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Annual Percentage Rate (APR) |
Required by the Truth in Lending Act (Regulation Z) and gives the borrower a better picture of the true cost of credit than just the interest rate on the loan. |
Expresses the relationship between the total cost of borrowing and the amount financed in % terms. |
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Assumable Loan |
If the borrower could purchase the property and just take over the exiating loan and it's payments, provided that the borrower may have to meet creditworthiness standards. |
Will not have an alienation clause (Due on Sale) |
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Balloon Payment (Balloon Loan) |
Is not fully amortized. When the final payment is reached, the borrower will have to repay the entire remaining loan balance, resulting in a significantly larger final payment. |
Also found in partially amortized loans. |
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Bi-Weekly Mortgage Plan |
Borrowers are often surprised to learn that this payment plan will result in significant savings and the loan being repaid in just over 22-25 years(depending on interest rate), rather than the full 30 yr term. |
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Blanket Mortgage |
A loan that is secured by more than one parcel of land. They often have a partial release clause which states that every time the borrower replays a specified sum, the lender will release the lein on one of the lots. |
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Buydown |
The lender is paid an extra amount upfront, in return for which the borrower is given a lower interest rate. |
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Consumer Financial Protection Bureau (CFPB) |
Was created by the Todd-Frank Wall Street Reform amd Consumer Protection Act in a response to the financial crisis of 2008. Funded by the Federal Reserve Board. |
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Conventional Loans |
Simply loans that are not issued by, insured by, nor guaranteed by the Federal Government or one of its agencies. |
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Conversion Option |
Available in some ARM's, where the borrower can choose to convert the loan to a fixed rate Loan, rather than adjustable. |
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Included in the Loan Estimate as part of the finance charge. |
VA funding fee, per diem interest, and origination charges are a part of the finance chlarge. The cost of the appraisal is not. |
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Business Cards, Company Website, and Residential Mortgage Loan Application form |
The u,pique identifier of any person originatingresidential loan must be clearly shown on all the following documents. |
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Refinance |
The satisfaction of an existing obligation and its replacement by a new obligation. |
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Acceptable age discrimination |
Only if the applicant is too young to enter into a legally binding contract. |
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Wire Transfer, Prepaidinterest, Mortgage insurance premiums |
Fees included in the calculation of the APR according to TILA. |
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Junior Mortgage Loan = High-Cost |
When its nominal interest rate exceeds the APOR by more than 8.5%. |
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Form 1003 Section I |
Type of Mortgage and Terms of Loan |
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Form 1003 Section II |
Property Information and Purpose of Loan |
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Form 1003 Section III |
Borrower Information |
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Form 1003 Section IV |
Employment Information |
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Form 1003 Section V |
Monthly Income and Combined Housing Expense Information |
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Form 1003 Section IV |
Assets and Liabilities |
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Form 1003 Section VII |
Details of Transactions |
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Form 1003 Section VIII |
Declarations |
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Form 1003 Section IX |
Acknowledgement and Agreement |
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Form 1003 Section X |
Information for Government Monitoring Purposes |
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