a. Annual Percentage Rate (APR)
b. Impound Accounts
c. Points
d. Prime Loans
e. Graduated Payment Mortgage
f. Private Mortgage Insurance (PMI)
g. Margin
h. Fixed Rate Mortgage
i. Index
j. Credit Scoring
 
 
1. ___ gives lenders a fast, objective measurement of a buyer’s ability to repay a loan or make timely credit payments.
2. ___ discounts paid to lenders, in effect, prepaid interest.  They are used by lenders to adjust the effective interest rate, so that it is equal to, or nearly equal to, the prevailing market rate.
3. ___ the relationship between  the total of the finance charges (interest rate, points, and the loan fee) and the amount financed, expressed as a percentage.  It is the actual cost of borrowing money.
4. ___ a loan where the rate and term are fixed, but monthly payments are smaller at the start of the term and increase over time.
5. ___ the starting interest rate used in an Adjustable Rate Mortgage as the indicator so that changes from it can be calculated.
6. ___ the spread between the index rate and the initial contract rate from which the lender will make a profit and cover its costs.  It is the agreed to (in advance) profit for the lender.
7. ___ financing on well-located properties to borrowers with good income and credit, which carry an interest rate of at least 2% to 7% above the rate of interest an association pays to its depositors.
8. ___ a loan for which the payments are the same each month for the life of the loan.
9. ___ prepaid items consisting of taxes, insurance and mutual mortgage insurance reserves, referred to as a “trust fund” or “trust account.” It is maintained by being included in the monthly loan payments and disbursed when taxes and insurance are paid.
10. ___ insures the lender against loss in the event of foreclosure and is required on all loans where the down payment is less than 20%.