Financing Flashcards
7 cards from real Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financing flashcards as text
A bridge loan is typically used to:
Answer: Cover the gap between buying a new home and selling the old one
A bridge loan provides short-term financing until the borrower's existing property sells.
If a borrower defaults, the legal process by which a lender forces sale of the property is:
Answer: Foreclosure
Foreclosure is the legal process allowing a lender to sell the secured property after default.
The right of a defaulted borrower to reclaim property before a foreclosure sale is the:
Answer: Equitable right of redemption
The equitable right of redemption lets a borrower reclaim the property by paying the debt before the sale.
A subordination clause in a mortgage:
Answer: Changes the lien's priority position
A subordination clause allows a lien to take a lower priority than a later loan.
Which loan feature protects an ARM borrower by limiting how much the rate can rise?
Answer: Interest rate cap
An interest rate cap limits how much an ARM's rate can increase per adjustment or over the loan's life.
A conventional loan is one that is:
Answer: Not insured or guaranteed by a government agency
Conventional loans are not backed by FHA, VA, or other government insurance programs.
The difference between the ARM index and the rate charged to the borrower is the:
Answer: Margin
The margin is the fixed percentage added to the index to determine the ARM's interest rate.