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Finance4
Finance
Question | Answer |
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APR | Annual percentage rate-a number that tells a borrower the total cost of a loan-not just interest, the sum of all charges associated with the loan |
Trigger term | An advertising term that tells a buyer financing is available without giving the cost of that financing-it triggers the need for additional information (montly payment, interest rate, down payment, term, ect) |
Equal Credit Opportunity Act | ECOA-a law prohibiting discrimination by lenders on the basis of sex, marital status, race, religition, age, or participation in public assistance programs |
Fair Credit Reporting Act | FCRA-a law allowing individuals to inspect their credit files, correct errors and attach explanatory statements |
Community Reinvestment Act | A law requiring lenders to meet the needs of the communtiy in which they are chartered to do business |
Redlining | The refusal to lend in a particular geographic area-prohibited by the Community Reinvestment Act |
Mortgage Broker | An individual who brings a borrower and lender for a fee-an intermediary between the borrower and the lender |
Mortgage Banker | A person or firm not otherwise in banking, who provides independent funds for mortgage financing as opposed to banks that rely on deposits of funds to originate loans |
Leverage | Using borrowed funds for investment-low down payment |
Equity | The market value of a property less the outstanding debt |
Seller's Equity | Cash price minus loan balance |
Buyer's Equity | The down payment amount at closing |
Usury | Charging an interest rate higher than the legal limit |
Usury Laws | Laws passed to protect consumers from excessive interest charges |
Predatory Lending | An unscrupulous lender taking advatage of a consumers lack of knowledge lending practices |