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7 Cards in this Set
- Front
- Back
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Seller concessions for conforming loans with an LTV of greater than 90% are… |
Limited to 3%. Limitations for seller financing – or seller concessions – are established by Fannie Mae and Freddie Mac for conforming loans. Limits are based on the down payment or loan-to-value (LTV) ratio. |
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FHA loans are beneficial because… |
They are insured by the federal government. This provides security for the lender in the event that the borrower defaults on payments. |
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A deed of trust is… |
A document used in place of a mortgage to secure the payment of a promissory note. This method is used in many states. |
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PFC” stands for… |
Prepaid finance charge. Prepaid finance charges are items paid at closing, such as discount points, prepaid interest, etc. |
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COFI” stands for… |
The Cost of Funds Index. COFI is a common index used to determine rate adjustments on adjustable-rate programs. |
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Option ARMs offer payment choices such as… |
Principal and interest Interest-only Minimum payment of the loan amount These flexible payment options made option ARMs popular products, but were often misunderstood by borrowers, leading to negative amortization. |
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APR” means… |
Annual percentage rate. This is the cost of credit expressed as a percentage. The Truth-in-Lending Act requires disclosure of this amount to loan applicants. |
