Champions School Of Real Estate Finance Exam 2024 Tested And Verified A home equity loan available to homeowners over 62 years of age - the lender makes payments to the borrower based on the equity in the property - the loan comes due upon the sale of the property or the death of the owner. - Reverse Annuity Mortgage A loan with an interest rate tied to a readily available index - the rate will be adjusted periodically causing payment changes. - Adjustable Rate Mortgage (ARM) The refusal to lend in a particular geographic area - prohibited by the Community Reinvestment Act. Prohibited by Federal Fair Housing Laws. - Redlining A home equity line of credit - similar to a credit card but secured by real property. - Openend Loan A combination of the TILA initial disclosure and the RESPA good faith estimate which must be provided to a buyer at the time of, or within three business days of loan application. - Loan Estimate The private equivalent of FHA insurance. Allowing for high LTV / low down payment conventional loans. Insures the lender's risk. - PMI A clause in a mortgage allowing the lender to declare the whole amount of the principal due and payable in the event of default by the borrower. - Acceleration Clause A debt at closing as shown on the closing disclosure. - Debit The percent of the price that the buyer is borrowing. High ratio means low down payment. - Loan to value ratio (LTV) A monthly payment amount of principal and interest required to amortize a loan of $1,000 based on the interest rate and the term of the loan - loan amount divided by 1,000 times the factor equals payment. (LOAN/[1000x]) = payment - Loan Factor Part equals percent times total. ( A basic formula for real estate math) - P=%xT 5,280 feet - 1 Mile A loan unable to be sold to Fannie Mae or Freddie Mac (i.e. A sub-prime loan) - NonConforming Loan VA -Veteran's administration - assists veterans in the purchase of housing by guaranteeing loans) Seller's equity - Cash price minus the loan balance A clause often found in a blanket loan allowing the borrower to obtain partial releases of specific lots by making required lump sum payments. - Release Clause One percent of a loan that is a loan processing fee - Origination Point The repayment or satisfaction of a debt by installment payments of principal and interest on a regular basis. - Amortization A law allowing individuals to inspect their credit files, correct errors and attach explanatory statements. - Fair Credit Reporting Act (FCRA) A law requiring lenders to meet the needs of the community in which they are chartered to do business. - Community Reinvestment Act A clause allowing a lender to move to or take a lower lien position. - Subordination Clause A loan whose payments start low and rise every year, usually for five years, after which they level off for the remaining term of the loan - can result in negative amortization. - Graduated Payment Mortgage (GPM)