Understanding Mortgages and Financing

Front

What is the literal meaning of the word "mortgage" based on its Latin roots?

Back

Dead promise

Front

In a fixed rate mortgage, what remains constant throughout the life of the loan?

Back

The interest rate and monthly payment

Front

Which type of mortgage involves a fixed initial interest rate that adjusts after a certain period?

Back

Adjustable Rate Mortgage

Front

What is a key feature of a reverse mortgage?

Back

The lender pays the homeowner, and no repayment is due until the home is sold or the homeowner dies.

Front

What is the role of an escrow company in a real estate transaction?

Back

To hold and transfer funds and documents between parties

Front

Which of the following is true about a home equity line of credit? It has a fixed interest rate, It is a form of revolving credit secured by a home, It requires monthly payments to be made to the lender, It cannot be used for home improvements

Back

It is a form of revolving credit secured by a home

Front

What is the primary difference between a second mortgage and a home equity loan?

Back

A second mortgage is a traditional loan, while a home equity loan is a line of credit.

Front

What does a prepayment penalty clause entail?

Back

A charge for repaying a mortgage before a specified period.

Front

Under which theory does the legal title remain with the mortgagor unless there is foreclosure?

Back

Lien theory

Front

What is an abstract of title?

Back

A document listing the history of ownership and any liens on a property