Term
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Definition
Payment# Rate Monthly Payment Principal Loan Balance
50,000 x .12 12% $514.31 50,000
12
514.31 50,000
-500.00 -14.31
= 14.31 49,985.69
49985.69 x .12/12 514.31 - 499.86 49985.69 - 14.45 |
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Term
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Definition
- FHA - 1934, part of HUD. FHA doesn't make loans, it insures them
- VA - 1944, to assist military vets, little or no downpayment, low rates
- Conventional - any loan that is not insured or guaranteed by and agency of the government.
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Term
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Definition
- 1936 to upgrade housing standards and promote home ownership and sound lending practices
- 203(b) FHA section is the original program for insuring loans
- 3.5% downpayment required from borrower either cash or gift or loan from relative.
- Max Loan to Value percentages: <50k, 97.5% >50k, 96.5%
- Loans are in $50 increments rounded to lower increment
- UFMIP, AMIP - UFMIP paid at closing, AMIP paid monthly. refund available if paid off during the first 5 years
- default results in lender reimbursement by HUD/FHA,
- max 30 years
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Term
Conventional Mortgage Loan |
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Definition
- any loan not insured or guaranteed by a government agency
- higher downpayment, higher rate, higher risk
- PMI - Private Mortgage Insurance 1957 required if loan exceeds 87% of the property value, if LTV is less than 78%, lender required to remove
- PMI has an annual plan (1% of the loan for the first year and then 1/4 of 1% of the balance of the loan) or 2-1/2% at closing.
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