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

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.

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.

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

Leave a Reply Cancel reply

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

Leave a Reply Cancel reply

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