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Question:

A note payable for “interest only” is called a (n) ____

A straight note.
explanation

Interest only loans are those that are not amortized as payments are not applied to the underlying principal.

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Related Questions

A negative amortizing loan allows unpaid interest to be added to the principle balance. This is an example of ____

compounding interest.

Compounding interest causes an additional cost of the interest expense on the interest not paid.

Inflation can be seen in the ____

increase in the cost of living.

Inflation is the reverse of deflation. Therefore, money becomes worth less and products become more expensive.

A “seasoned” loan is a (n) ____

loan in which there is a record of consistent and timely payments made on the loan.

A seasoned loan has a consistent history of loan repayment. An investor may feel more inclined to purchase a seasoned loan as they are confident the borrower will continue to make the required payments.

When the buyer takes title to the property subject to the existing loan, “subject to” most nearly means ____

the buyer will not be personally liable for the loan.

As opposed to assuming a loan, when the buyer takes title “subject to” an existing loan, the seller remains liable for the debt.

A shared appreciation mortgage (SAM) is most beneficial when ____

prices of homes are steadily appreciating.

Steady home price appreciation makes the shared appreciation mortgage (SAM) in which the lender receives a share in the future increase in the value of a property a valid choice for both the lender and the borrower.

How does a home equity line of credit differ from a second mortgage?

With a home equity line of credit the borrower can draw money as they need it.

In a traditional second mortgage, a borrower would take all of the money loaned to them at one time. In a home equity line of credit the borrower may take up to a specified amount, but they do not need to take that amount in full or all at one time.

An all-inclusive trust deed (AITD), also known as a(n) ____, reduces the seller’s risk of loss and defers more profit taxes than a regular second trust deed note.

wraparound mortgage

Another name for an all-inclusive trust deed (AITD) is a wraparound mortgage.

When the debt has been paid in full, the trustee will record what legal instrument to remove the lien on a trust deed from the public record?

Reconveyance deed.

A trustee records a reconveyence deed to release a trust deed.

Which of the following is true concerning a hard money loan?

It is a cash loan.

Hard money loans are made by a private lender to generate cash for a property owner.

Under the Federal Truth-in-Lending Act (TILA), the cost of credit is expressed as ____

an annual percentage rate.

Financing costs are stated as an annual percentage rate (APR) .

Marta borrowed $25,000 on a straight note. In eight months, she paid $1,500. What was the interest rate ____

9%.

This question calls for an interest rate calculation using the following formula: Interest = Principal x Rate x Time (I = PRT).
$1,500 = $25,000 x R x 8/12
1,500 = 25,000 x R x 0.667
1,500 = 16,667 x R
1,500 / 16,667 = (16,667 x R) / 16,667
0.09 = R or 9%

A blanket encumbrance created for a real estate loan would most likely benefit the ____

beneficiary.

A blanket encumbrance gives the lender (the beneficiary) added security for the loan.

Inflation can be seen in the ____

increase in the cost of living.

Inflation is the reverse of deflation. Therefore, money becomes worth less and products become more expensive.

The charging by a private lender of more than the maximum amount of interest allowed by law is known as ____

usury.

Usury is the term that describes an interest rate that exceeds the legal limit.

A loan broker arranged a home equity loan for $9,600. The broker must provide the borrower with which of the following?

Mortgage loan disclosure statement.

A lender who originates a home equity line of credit (HELOC) is required to deliver a copy of the mortgage loan disclosure statement to the borrower.