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Finance5
Finance
Question | Answer |
---|---|
Loan Processor | An individual who coordinates the loan application process for the lender |
Qualifying Ratios, Debt Ratios | The percent of monthly income that can be used to pay the PITI payment on a mortgage loan and the percent of monthly gross that can be used to cover all debt including the PITI-28%-36% would be typical debt ratios |
PMI | Private Mortgage Insurance-the private equivalent of FHA insurance allowing for high LTV/low down payment convential loans-PMI inusres the lenders risk |
Discount Rate | The rate banks pay when borrowing from the Federal Reserve |
Reserve Requirement | The percent of deposits banks are required to keep in the bank-set by the Federal Reserve |
Point | One percent of the loan |
Discount Point | One percent of the loan that is prepaid interest, tax deductible and results in increased yield for the lender |
Origination Point | One percent of the loan that is loan processing fee |
Buy Down | An upfront payment of points used to reduce the borrower's monthly payment-by paying points closing a borrower may secure a lower rate on the loan |
Prime Rate | The interest rate commercial banks charge their preferred customers |
Lien Theory State | A state where the mortgage lender has lien on the property and the borrower has tittle |
Title Theory State | A statement where the mortgage lender has title to the property until the debt is repaid |
Down Payment Assistance Programs | Governemnt and private programs whose stated purpose is to help buyers to become homeowners |