Mortgage JEOPARDY GAME

Mortgage Term Jeopardy

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After the Storm

Show Me the Money!

Loan Process

Acronyms

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Acronyms

Question 1/5

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Acronyms

+100 points

Hint

What does APR Stand for?

ANSWER

What is...

Annual Percentage Rate?

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Question 2/5

Acronyms

+200 points

Hint

What does DTI Stand for?

ANSWER

What is...

Debit-to-Income?

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Acronyms

Question 3/5

Points in play

+300 points

Hint

What does LTV Stand for?

ANSWER

What is...

Loan-to-Value?

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Acronyms

Question 4/5

Points in play

+400 points

Hint

What does APR Stand for?

ANSWER

What is...

Principal, Interest, Taxes and Insurance?

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Question 5/5

Acronyms

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+500 points

Hint

What does CLTV Stand for?

ANSWER

What is...

Combined Loan-to-Value?

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Acronyms

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Show Me the Money

Question 1/5

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Show Me the Money

+100 points

Hint

This is a deposit a homebuyer makes when entering into a purchase agreement for a home, generally as a sign of good-faith intent.

ANSWER

What is...

Earnest Money?

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Question 2/5

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Show Me the Money

+200 points

Hint

This is the original principal balance of the mortgage loan.

ANSWER

What is...

Loan Amount?

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Question 3/5

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Show Me the Money

+300 points

Hint

Buyers typically bring a percentage of the home’s value to help lower the interest rate or the monthly payment. What is this called?

solution

What is...

Down Payment?

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Question 4/5

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Show Me the Money

+400 points

Hint

Also known as an impound account, this account holds the portion of a borrower’s monthly mortgage payment that covers homeowners’ insurance and property taxes.

answer

What is...

Escrow?

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Question 5/5

Points in play

Show Me the Money

+500 points

Hint

What are the upfront fees associated with getting a mortgage that a borrower brings to their loan signing?

answer

What is...

Closing Costs?

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Show Me the Money

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Loan Process

Question 1/5

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Loan Process

+100 points

This Ratio divides a borrower’s total housing expenses by their monthly income, and should be 28% or less for approval.

solution

What is...

Housing Ratio?

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Question 2/5

Arts

Points in play

Loan Process

+200 points

Hint

This letter is needed from a bank or mortgage lender for a borrower showing a specific amount of money to buy a home.

solution

What is...

Pre-Approval?

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Question 3/5

Arts

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Loan Process

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Hint

This standardized three-page document contains details about a mortgage and is given to a borrower when they apply for a loan.

solution

What is...

Loan Estimate?

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Question 4/5

Arts

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Loan Process

+400 points

This value is a professional judgement of a property’s worth where this value illustrates what the buyer is willing to pay for this home. *There are two answers

solution

What is...

Appraised Value & Purchase Price?

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Question 5/5

Arts

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Loan Process

+500 points

Hint

During this process the bank or mortgage lender assesses the risk they would be taking by lending to a given borrower.

solution

What is...

Underwriting?

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Loan Process

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After the Storm

Question 1/5

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After the Storm

+100 points

Hint

This type of coverage is required when a borrower is making a down payment of less than 20 percent for a conventional loan.

solution

What is...

Private Mortgage Insurance (PMI)?

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Question 2/5

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After the Storm

+200 points

This Analysis is done once a year to review the activity from the past 12 months, with projections for the next 12 months in relation to collection of insurance premiums and property taxes.

solution

What is...

Escrow Analysis?

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Question 3/5

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After the Storm

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The process of using a new loan to payoff your current one to lower the interest rate or take out the equity is?

solution

What is...

Refinance?

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Question 4/5

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After the Storm

+400 points

Hint

What describes the process of paying off a loan in installment payments over a period of time?

solution

What is...

Amortization?

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Question 5/5

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After the Storm

+500 points

What is the manner in which the title is held, and refers to your legal rights to the home you own?

solution

What is...

Vesting?

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After the Storm

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The deposit is typically held by the title company in an escrow account. When the home sale closes, this goes toward the down payment or closing costs. If the sale falls through, the deposit is either returned to the buyer or given to the seller, depending on whether the reason for termination was permitted in the purchase agreement.

This letter doesn’t mean the borrower is guaranteed a loan, but the letter can be given to a seller to demonstrate that the homebuyer is in a strong position to get financing.

This is used by mortgage lenders to compare the loan amount against the property value. Typically, a ratio of 80 percent or less — which corresponds to a 20 percent down payment — is ideal. With a conventional loan, a ratio greater than 80 percent means you’ll need to purchase private mortgage insurance, an extra expense. Some government-backed mortgages, such as FHA or VA loans, permit higher ratios, and may or may not come with the mortgage insurance requirement.

Part of each payment goes toward the principal, or the amount borrowed, while the other portion goes toward interest. A typical home loan might payments over a 15-, 20- or 30-year term, with the amount allocated to interest and principal decreasing and increasing, respectively, over the term.

This process considers factors like the borrower’s credit report and score, income, debt, and the value of the property they intend to buy. Many lenders follow standard guidelines from Fannie Mae and Freddie Mac when determining whether to approve a loan.

These accounts also hold the earnest money the buyer deposits between the time their offer have been accepted and the closing. The account is used for insurance and taxes is usually set up by the mortgage lender, who makes the insurance and tax payments on the borrower’s behalf. This system assures the lender that those bills are paid and gives the borrower the convenience of paying for these expenses in small installments each month, instead of being hit with a large bill once or twice a year. All our loans are required to have this account.

This reflects the cost of borrowing the money for a mortgage. A broader measure than the interest rate alone. It includes the interest rate, discount points and other fees that come with the loan. It is higher than the interest rate and is a better gauge of the true cost of the loan.

Usually including any mortgage insurance premium or mortgage guaranty funding fee set forth in the applicable program documents.

This is the amount of a home’s purchase price a homebuyer pays upfront. Buyers typically brings a percentage of the home’s value to the closing table, then borrow the rest in the form of a mortgage. A larger amount can help improve a borrower’s chances of getting a lower interest rate. Different kinds of mortgages have varying minimum amounts.

They include a variety of expenses paid at the time of the loan signing, such as an origination fee, appraisal fee, credit report fee, title search fee and others. These costs are generally paid by homebuyers, but sellers may cover some of the costs in certain situations.

The portion of your payment that covers the loan amount borrowed, what the lender gets as repayment for the loan. Another portion covers property the home sits on and to protect it. These funds may go into an escrow account.

This protects the lender — not the borrower — from loss if the borrower stops making payments on the loan. When purchasing or refinancing, it may be required if the borrower’s home equity is less than 20 percent of the property’s value.

This document includes the interest rate, monthly payment, and the total closing costs, and taxes, insurance, prepayment penalties and other important information about the loan. It is designed to make it easier for borrowers to compare terms when shopping for a mortgage — receiving one does not mean they’ve been approved or denied for the loan.

This is a measure of a borrower’s ability to repay a mortgage and is calculated by adding up all of the borrower’s monthly debt payments and dividing the total by the borrower’s gross monthly income. For example, if a borrower’s debt payments total $4,000 a month and their gross monthly income is $10,000, the ratio would be 40 percent. Many lenders look for borrowers to have a ratio no higher than 43 percent, but there is some flexibility with that figure.

This is the sum of the balances of multiple loans on a property divided by the property’s value. This ratio is often described as a percentage