Chapter 12: Financing: Loan Types Summary
Borrower Fees
Repayment Plans
Types of Loans
Loan-to-value ratio - the ratio of debt to the value of the property. When talking about mortgages, the value is the sale price or the appraised value, whichever is less.
1. Conventional Loans
Down payment of 20% or more, making the loan 80% or less of the property's sale price.
Conventional loans are typically uninsured. The mortgage itself provides the only security for the loan.
A borrower can get a conventional loan with a lower down payment by insuring the loan through a private mortgage insurance program (PMI). The lender will terminate the PMI payments once the loan has been repaid to a certain level.
2. FHA-Insured Loans
The FHA, overseen by HUD, provides low down-payment loans (high loan-to-value ratio loans) to qualified buyers.
FHA does not build homes or loan money directly. They insure loans made by approved lending institutions.
3. VA Loans
Available to eligible veterans and their spouses. A VA loan is guaranteed. The VA does not loan the money directly (usually) and the guarantee provides added security for the lender.
A VA loan can be used to purchase, build and improve a home.
In most cases, no down payment is required. The VA guarantees both fixed-rate and adjustable rate loans.
VA loans are assumable - the original veteran borrower is still liable for the repayment of the loan unless the VA approves a release of liability (does not release the veteran's liability to the lender).
A veteran must apply to the VA for a certificate of eligibility to determine the eligible status and to determine the amount of the loan the VA will guarantee.
The VA requires an appraisal of the property and then issues a certificate of reasonable value (CRV).
4. CalVet Loans
The CalVet loan is actually a land contract.
The state purchases the property and resells it to the veteran using a contract of sale. The state retains the title to the property until the loan is paid off.
Other Common Financing Types
Other Types of Financing
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Notice | 부동산 용어사전 | 2019.04.15 | 2202 |
Notice | 부동산 용어 (A to Z) | 2019.03.03 | 1442 |
171 | 96003 | 2019.05.29 | 167 |
170 | Chapter 9 Quiz | 2019.04.15 | 169 |
169 | Real Estate Law 6 | 2019.05.04 | 169 |
168 | Music | 2018.08.26 | 170 |
167 | Chapter 2 Review (2) | 2019.05.04 | 170 |
166 | Department of Real Estate - Commissioner | 2019.06.01 | 171 |
165 |
Secured Property Taxes
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164 | Chapter 10 Quiz | 2019.04.16 | 172 |
163 | Real Estate Law 1 | 2019.05.03 | 173 |
162 |
Chapter 2 Review (5)
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161 | A promissory note | 2019.05.27 | 177 |
160 |
1031
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159 | If a contract for sale provides that the owner is selling his home in an "as-is" condition, then | 2019.05.27 | 179 |
» | Chapter 12 Conclusion | 2019.04.26 | 180 |
157 | Chapter 7 Quiz | 2019.04.14 | 183 |
156 | Real Estate Law 29 | 2019.05.07 | 183 |
155 | discriminate | 2019.05.22 | 184 |
154 | Open-End Mortgage | 2019.06.05 | 185 |
153 | 12555 Euclid Street #31 Garden Grove, CA 92840 | 2017.07.09 | 187 |
152 | Chapter 18 Conclusion | 2019.03.23 | 188 |
151 | (new) Anaheim, CA 92804 | 2017.06.20 | 189 |
150 | 3 | 2017.07.19 | 191 |
149 | Chapter 1 Quiz | 2019.04.11 | 191 |
148 | Real Estate Law 104 | 2019.05.17 | 191 |
147 | The major concerns of state laws | 2023.07.05 | 191 |
146 | HUD’s advertising guidelines | 2023.07.06 | 193 |
145 | Anaheim, CA 92804 new | 2017.06.19 | 194 |
144 |
route
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143 | quiet title | 2019.05.22 | 195 |
142 | Chapter 3 TEST (2nd) | 2019.03.02 | 198 |