Finance & Mortgages Flashcards
6 cards from real Real Estate practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Finance & Mortgages flashcards as text
RESPA (Real Estate Settlement Procedures Act) primarily protects consumers by:
Answer: Requiring disclosure of settlement costs and prohibiting kickbacks
RESPA requires lenders to provide a Loan Estimate and Closing Disclosure, and prohibits kickbacks, referral fees, and unearned charges in the settlement process.
TILA (Truth in Lending Act) requires lenders to disclose the:
Answer: Annual Percentage Rate (APR) and total finance charges
TILA mandates clear disclosure of the APR, total cost of credit, and other loan terms so borrowers can compare loan offers accurately.
An escrow account held by a mortgage servicer is used to pay:
Answer: Property taxes and insurance premiums on behalf of the borrower
Lenders often require escrow accounts to collect monthly portions of property tax and insurance, ensuring these bills are paid and protecting the collateral.
PITI stands for:
Answer: Principal, Interest, Taxes, Insurance
PITI represents the four components of a typical monthly mortgage payment: Principal, Interest, Taxes (property), and Insurance (homeowners/hazard).
A wraparound mortgage is a form of seller financing where:
Answer: A new loan wraps around and includes the existing mortgage balance
In a wraparound, the seller creates a new mortgage that includes the existing loan balance; the buyer pays the seller, who continues to pay the underlying lender.
Seller financing (owner financing) means the:
Answer: Seller acts as the lender, extending credit to the buyer directly
In seller financing, the property owner extends a loan directly to the buyer, often used when traditional financing is unavailable or to expedite closing.