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Real Estate 5
Real Estate Principals lesson 5
Question | Answer |
---|---|
Monetary Cycle | Depression,Recession,Prosperity, and Expansion |
Who does Inflation benefit? | trustor and a lender who grants loans |
a decrease in the general level of prices cause? | increases in the value of money |
What is considered liquid? | investments in stocks and bonds |
What is not considered liquid? | investments in income property |
Equity? | Money that doesn't work (money in a mattress) |
what is the difference between the loan and the value of the property? | equity |
What is an investor using leverage? | using borrowed money to the maximum |
When the value of the property increases, what else increases? | the equity |
Gross national(Domestic) Product | the measure of goods and services produced by the nation during any one calender year |
what rises with GNP? | personal income and home sales |
seller's market is good for sellers as to? | a buyers market is good for buyers |
what happens when interest rates on bonds increase? | the supply of funds for real estate loans decrease |
Who do lenders represent? | primary mortgage market |
Secondary mortgage market? | where existing loans are bought and sold |
What is important in the secondary mortgage market? | liquidity and marketability |
who has the primary source of funds for real estate financing? | institutional lenders |
where do institutional lenders receive most of their money? | savings of individual savings (household funds) |
Insurance companies lend to? | large projects in large amounts |
Participation Loans | insurance company wants their cut of a project |
Savings and Loan Associations lend to? | home loans for one to four family units |
Who is the primary source for residential mortgages? | Savings and loan associations |
commercial banks are? | general purpose lender |
commercial banks prefer? | short term loans, mostly construction |
federal reserve board? | influences the flow of money |
federal reserve board does Not? | they do not adjust FHA interest rates |
Where did mutual savings banks originate? | Northeastern America |
Nonistitutional lenders are? | mortgage companies and private lenders |
mortgage companies prefer? | prefer negotiating loans on secondary market |
what is the difference between a banker and a broker? | bankers lend their own money and a broker lends someone else's |
"Warehousing" | Collecting loans proior to resale |
Private lenders? | largest source for junior loans |