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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 |
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