Unformatted text preview: nded. The lender can secure an additional amount of security for the loan at no extra cost. The processing time and the issuance of the insurance commitment is usually faster from a PMI company than the FHA. Advantages for the borrower – 1. 2. The borrower has the ability to purchase a home with a conventional loan with as little as 5 percent down payment. With the need for less money down, the borrower can buy a home sooner and sometimes larger than expected. 6-24 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 6: HARD MONEY LOAN & CONVENTIONAL LOANS
3. 4. The processing time for the insurance commitment is usually faster than with the FHA. The payment of the insurance premiums is for a shorter period than FHA. CHAPTER QUIZ
1. Which of the following would be a hard money loan? A. B. C. D. 2. A purchase money loan made by an institutional lender Seller carryback financing Assuming existing loans with no balance A loan arranged by a mortgage loan broker The most important criteria used by lenders of hard money loans would be the borrowers: A. B. C. D. Equity Credit history Job History 3. Reasons why institutional lenders turn down loan applications could deal with: A. B. C. D. Borrowers capacity to make payments Borrower’s credit history The type of property the loan is sought on All of the above 4. Characteristics of hard money loans, as compared with loans made by institutional lenders, are: A. B. C. D. Shorter terms Higher rate of interest Non–amortized All of the above
Dynasty School (www.dynastySchool.com) 6-25 REAL ESTATE FINANCE 5. Hard money lending is not without risk. Risks include: A. Foreclosure costs B. Costs associated with delinquent senior liens C. Marketing costs after foreclosure D. All of the above A non–government–backed loan is best known as a loan. A. B. C. D. Portfolio Standard Conventional Normal 6. 7. Private mortgage insurance covers what portion of the loan amount? A. B. C. D. Upper p...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10