#1
What is the term for the initial payment made by a borrower to secure a mortgage?
Down payment
ExplanationInitial payment to secure a mortgage.
#2
What does APR stand for in real estate financing?
Annual Percentage Rate
ExplanationAnnual Percentage Rate in real estate financing.
#3
What is the typical duration of a fixed-rate mortgage?
30 years
ExplanationTypical duration of a fixed-rate mortgage is 30 years.
#4
In real estate financing, what is the role of a title insurance?
To protect the buyer against defects in the title
ExplanationTitle insurance protects buyer from title defects.
#5
What is the role of an escrow account in real estate transactions?
To store earnest money and pay property taxes and insurance
ExplanationEscrow stores money and pays taxes/insurance.
#6
What is the term for a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency?
Jumbo mortgage
ExplanationMortgage exceeding conforming loan limits.
#7
What is the purpose of private mortgage insurance (PMI)?
To protect the lender in case the borrower defaults on the loan
ExplanationPMI protects lender from borrower default.
#8
What is the term for a loan where the interest rate remains the same for the entire term of the loan?
Fixed-rate mortgage
ExplanationLoan with a constant interest rate throughout the term.
#9
What is the Debt-to-Income ratio (DTI) used for in real estate financing?
To assess the borrower's ability to repay the loan
ExplanationDTI assesses borrower's repayment ability.
#10
What is a prepayment penalty in the context of mortgage loans?
A penalty for paying off the mortgage early
ExplanationPenalty for early mortgage repayment.
#11
What does LTV stand for in real estate financing?
Loan-to-Value
ExplanationLoan-to-Value ratio in real estate financing.
#12
What is the term for the legal document that outlines the terms and conditions of a mortgage loan?
Promissory Note
ExplanationLegal document outlining mortgage terms.
#13
What is a balloon mortgage?
A mortgage with a large final payment after a series of smaller payments
ExplanationMortgage with large final payment.
#14
What is a mortgage origination fee?
A fee charged by the lender for processing a loan application
ExplanationLender fee for processing loan application.
#15
What is the primary function of an escrow account in real estate transactions?
To store earnest money and pay property taxes and insurance
ExplanationEscrow stores money and pays taxes/insurance.