Mortgage Terms 4

Question 1

What is a 'short sale' in real estate and mortgage terms?

Accepted Answer

Selling a property for less than the outstanding mortgage balance with lender approval

Answer

A home sold within 30 days of listing

Answer

A cash purchase requiring no mortgage

Answer

A sale between family members at a discounted price

Question 2

What is 'mortgage forbearance'?

Accepted Answer

A temporary pause or reduction of mortgage payments granted by the lender during financial hardship

Answer

A permanent reduction in a mortgage's interest rate

Answer

The transfer of a mortgage to a new borrower

Answer

A penalty waiver for late mortgage payments

Question 3

What does the term 'assumable mortgage' mean?

Accepted Answer

A mortgage that can be transferred from the seller to the buyer, who takes over the existing loan terms

Answer

A mortgage that automatically renews at the end of its term

Answer

A mortgage assumed to be risk-free by the lender

Answer

A loan that requires no income verification

Question 4

What is a 'deed of trust' as opposed to a mortgage?

Accepted Answer

A three-party security instrument used in some states where a trustee holds title until the loan is repaid

Answer

A document that transfers full ownership of property to the lender immediately

Answer

A legal agreement that waives the lender's right to foreclose

Answer

A title document used exclusively for commercial properties

Question 5

What is a 'piggyback loan' in mortgage financing?

Accepted Answer

A second mortgage taken simultaneously with the first to avoid PMI or cover the down payment

Answer

A mortgage that automatically increases in size over time

Answer

A government-backed loan added on top of a conventional mortgage

Answer

A loan co-signed by a family member to help qualify

Question 6

What is 'predatory lending' in the mortgage industry?

Accepted Answer

Unfair, deceptive, or abusive loan terms and practices that exploit borrowers, especially vulnerable ones

Answer

Lending money at competitive rates to attract borrowers from other banks

Answer

Aggressive marketing of mortgage products to new homebuyers

Answer

Lending to borrowers with high credit scores who don't need financial assistance

Question 7

What is 'equity stripping'?

Accepted Answer

A predatory practice of loading a property with debt to drain the owner's home equity

Answer

The gradual increase in home equity through mortgage payments

Answer

The legal process of dividing property equity in a divorce

Answer

Refinancing to pull equity out for home improvements