Term
| What are the 5 forms of property ownership? |
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Definition
Joint Tenancy
Tenancy in the Entirety
Sole Ownership
Tenants in Common
Community Property |
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Term
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Definition
| 2 or more people own it together, undivided shares. When one dies, it passes undivided to the rest. |
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Term
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Definition
| 2 or more people own it together, undivided shares. When one dies, it passes undivided to the rest. |
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Term
| What is Tenancy in the Entirety? |
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Definition
| Husband and wife, each owning half. One can't sell without the consent of the other. |
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Term
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Definition
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Term
| What is Tenants in Common? |
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Definition
| Each person has an interest, they don't have to be equal. When the person dies, he/she passes the interest to whoever he/she names. |
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Term
| What is Community Property? |
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Definition
| Special kind of joint tenancy, each party owns half. Upon death, the interest is passed to whoever is named in the will. |
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Term
| What are the 3 most common restrictions for land use imposed by the govt? |
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Definition
zoning
environmental hazards
public easement/right of way |
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Term
| What are the 3 approaches to valuation in appraising a home? |
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Definition
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Term
| When is the Income Capitalization Approach used to appraise real estate? |
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Definition
| When the real estate is bought to produce income |
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Term
| When is the Cost approach used in appraising real estate? |
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Definition
| Used when properties are new. Appraise property on basis on what it would cost to replace it. |
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Term
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Definition
1/2 of 1% of the loan size.
(loan amt*.005)/12(months in a year)=monthly PMI payment. |
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Term
| What are the ways to avoid PMI? |
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Definition
| piggy back loans. In an 80-10-10 loan, the mtg. is 80%, a 2nd mtg is 10%, and borrower pays 10% down. |
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Term
| What did the Homeowners Protection Act of 1998 do to PMI? |
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Definition
For loans closed after 7/29/99, Lenders or servicers must notify homeowners of their right to cancel PMI when they reach 20% equity. It's mandatory to cancel PMI when they reach 22%.
3 cases when homeowners must be notified of their rights: At closing, annually, and upon cancelling PMI.
Also, upon closing, lenders must tell homoeowners how long it'll take them before they can cancel PMI. |
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Term
| Up to what percentage can lenders charge PMI to high risk borrowers? |
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Definition
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Term
| When is the lender not obligated to cancel PMI? |
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Definition
| When borrower has 2nd mtg, property has dedclined in value, a 30 day late within the year, or 60 day late over a year before. |
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Term
| What are Fannie Mae and Freddie Mac's rules for cancelling PMI? |
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Definition
If a loan was sold to them, borrower can cancel after 2 years if they have 25% equity, or after 5 years if they have 20% equity. Based on current appraisals.
The borrower must request cancellation |
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Term
| When is PMI cancellation determined by the lender? |
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Definition
| If the loan was before 7/29/99, and it's not held by Fannie Mae or Freddie Mac. |
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Term
| How do you calculate PMI? |
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Definition
1. Find LTV
2. look up monthly rate for loan based on loan type (i.e. ARM, 30 year fixed) and LTV, found above
3. Multiply PMI monthly rate by loan amt, and divide by 12. |
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Term
| Who requires mortgage insurance premiums (MIP) for their loan programs? |
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Definition
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Term
For FHA Mortgage Insurance Premiums, how much is paid at closing? Can it be financed?
Who doesn't have to pay the MIP at closing? |
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Definition
1.5% of the loan amt. It can be financed.
Condos don't have to pay the MIP at closing. |
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Term
| How much is the monthly Mortgage Insurance Premium included in the PITI? |
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Definition
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Term
| What's the MIP paid on a non-FHA, conventional loan? |
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Definition
.5% at close, with 10% down payment.
Renewal can be .3% |
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Term
| Can MIP be cancelled during the life of the loan? |
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Definition
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Term
How does Lender Paid Mortgage Insurance work?
Tax implications? |
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Definition
Lender pays, in exchange for slightly higher rate loan (abour .25%).
Tax implications: Converts non-tax deductible insurance premiums into tax deductible interest |
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Term
| When is the conveyance of real property complete? |
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Definition
| When the deed is delivered to the buyer. |
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Term
| What's the purpose of recording the deed? |
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Definition
Gives notice to the world that the new buyer has an interest in the property
Tracks chronological chain of title |
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Term
| What's title insurance for? |
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Definition
| The title insurer checks to make sure the property has a clear title, with no unresolved claims. |
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Term
| What is adverse possession? |
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Definition
| Adverse possession allows a person to get title to land from the actual owner simply by using the land, out in the open for all to see. |
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Term
| What are the stipulations for an adverse possession claim? |
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Definition
The time required varies from a few years to 20 or more
Public entities must establish a longer period than individuals
In some states, adverse possessor must pay taxes every year |
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Term
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Definition
States and localities and the federal government can condemn and force the sale of private property for public purposes.
Owner receives just compensation |
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Term
| How long does title insurance last? What does it protect? |
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Definition
Until the loan is repaid.
It protects the lender for the amt. of loan, but not protect the BORROWER. |
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Term
| How does the borrower get protection to ensure a clear title? |
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Definition
| Owner's title insurance. Sometimes seller pays, sometimes borrower pays. |
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Term
| How long of a title history must be required before closing? |
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Definition
| 12 month title history is req'd before closing. |
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