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Real Estate- Chapter 09- Concepts
Real Estate- Chapter 09- Concepts
15
Law
Post-Graduate
08/15/2014

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Term
Introduction to Real Estate Loan Process
Definition
Most buyers require a mortgage to pay for the purchase of real estate. The process may begin with the buyer seeking pre-approval to determine the mortgage amount for which the buyer qualifies
Term
The Mortgage Lending process
Definition

Given the costs, it is rare that a purchaser will ahve sufficient resources to pay cash to complete the purchase, requiring most borrowers to borrow funds for this purpose.

 

Mortgage lending or real estate financing is the procee of borrowing funds to purchase real estate.

Term
Pre-Qualification
Definition
The buyers' pre-qualification is an effort by real estate professionals and lenders to screen potential buyers to determine their financial ability to purchase real estate.
Term
Loan Application
Definition
The process begins with meeting with a mortgage lender or borker, during which a formal loan application will be completed. The application is very detailed in seeking information about the borrower, the type of loan requested, and the property being purchase. Information is also required on employment history, sources of income, assets, and liablity for each borrower.
Term

Types of Mortgages:

 

What are Mortgages generally?

Definition
Mortgage loans are competitive products designed to meet the needs of consumers looking for the "best deal." Mortgage loans are available from a wide variety of providers, such as private financiers, banks, savings and loans, credit unions, insurnaces companies and other investors. A number of solutions are offered to meet the borrowers needs.
Term
Types of Mortgages
Definition

1) fixed rate mortgage

2) adjustable rate mortgage (ARM)

3) balloon mortgage

4) Graduated payment mortgage (GPM)

5) seller's mortgage

6) reverse mortgage

Term
fixed-rate mortgage
Definition
a mortgage where the interest is set for the duration of the loan
Term
adjustable rate mortgage (ARM)
Definition
A mortgage where the interest rate can be adjusted over the lifetime of the loan
Term
A balloon mortgage
Definition
a mortgage where the payment are based on a fixed rate over a long-term period, such as 30 years, but the loan balance is due in the full at the end of a short term
Term
Graduated-payment mortgage (GPM)
Definition
a mortgage with an initial low periodic payment that is below the required self-amortitizing payment
Term

Seller's mortgage and

 

Purchase-money mortgage

Definition
Sellers may help the buyer by having the buyer assume the seller's mortgage or taking back a mortgage
Term
Reverse Mortgage
Definition
For senior citizens who wish to stay in their own home but obtain funds based on the home collateral, some lenders provide a reverse mortgage where the homeowner receives monthly payments from the lender, but the loan does not have to be repaid until the property is sold, the homeowner dies,, or the owner no longer uses the home as his or her primary residence.
Term
Loan Qualification
Definition
During the loan qualification process, the lender evaluates two items to determine whether to approve the loan. First is a review of the loan application, verifying the information contained in the application to determine whether the borrower is creditworth- that is, more likely than not to repay the loan. The second part relates to the use of the real estate as collateral for the loan: its value and any clouds on the title
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