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Forms of Financing
Term | Definition |
---|---|
FHA Loans | Loans insured by the Federal Housing Act. It only insures loans made by approved lending institutions. |
Appraisal Requirement | Loan is based on the lowest of the purchase price or appraised value. |
FHA Conditions | Loan cannot be insured unless property is fixed up. |
Mortgage Insurance Premium | Paid as on time fee or monthly. |
Assumption | Available based on lenders approval of new buyer. |
VA Financing | Borrower must be a veteran and must obtain a certificate of eligibility. Vets administration guarantees th Elian to the lender. |
Assumption VA | VA loans are assumable by non-veterans with lenders approval. The vet can go purchase a second home under second entitlement.. |
Appraisal Requirements | VA issue a CRV certificate of reasonable value. Fixed up free of any code violations. |
GNMA | Division of HUD. Low-yield loans such as FHA. Pass through certificate which are security interest in a pool of mortgage. |
Freddie Mac | Established to provide funding for federal savings and loans. Primarily conventional loans. Raises funds by purchasing pools or secured bonds. |
Fannie Mae | Is organized as a private corporation. Buys a block or pool of mortgage from lender in exchange for mortgage backed securities. |
Regulation Z | Requires lender to use APR that includes all interest, fees, discount points, pre payment charges. Loans estimate, 3after app, 3days before cons of loan. |
Advertising Requirments | Truth in advertising, all finance charges must be included in advertising. |
Right to Rescind a Transaction | When refinancing a property the owner may rescind the loan within 3 business days after the closing and receive refund of loan fees. |
Pre Payment Penalty | To discourage borrower from selling or refinancing to pay off loan , to compensate lender for loss of revenue. |