#1
What is a mortgage?
A loan to purchase real estate
ExplanationLoan for real estate purchase
#2
What is the purpose of a real estate appraisal?
To estimate the property's market value
ExplanationEstimate property value
#3
What is the loan-to-value ratio in real estate finance?
The ratio of loan amount to property value
ExplanationRatio of loan to property value
#4
What is the primary function of Fannie Mae and Freddie Mac in the mortgage market?
To purchase and guarantee mortgages
ExplanationPurchase and guarantee mortgages
#5
What is the debt-to-income ratio in the context of mortgage lending?
The ratio of monthly debt payments to gross income
ExplanationRatio of debt payments to income
#6
In real estate, what does the term 'closing costs' refer to?
Fees and expenses associated with the property purchase transaction
ExplanationFees associated with property purchase
#7
What is the difference between a mortgage broker and a loan officer?
A mortgage broker works for the lender, while a loan officer works for the borrower.
ExplanationBroker vs. loan officer roles
#8
What is the purpose of a title search in real estate transactions?
To verify the legal ownership of the property
ExplanationVerify property ownership
#9
What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?
Fixed-rate mortgages have a constant interest rate, while ARMs have a variable rate.
ExplanationFixed vs. variable interest rates
#10
What is private mortgage insurance (PMI) used for?
To protect the lender in case of borrower default
ExplanationLender protection in default
#11
What is an amortization schedule in the context of mortgage loans?
A table showing the repayment of the loan over time
ExplanationLoan repayment schedule
#12
In the context of real estate finance, what does the term 'escrow' mean?
A third-party account to hold funds for property-related expenses
ExplanationThird-party fund holding