Why might a wraparound lender provide a wraparound loan at a lower rate than a new first mortgage?

Q: What Percentage of down- payment do you have to give to the bank when buying a mortgage

A: Down Payment : It is the Initial lump sum amount which the borrower pay before sanction of loan.…

Q: Explain Second Mortgages and Shorter Maturities?

A: It is a type of mortgage loan which is similar to a mortgage loan which is tenable by a borrower's…

Q: balloon-payment mortgage. Why might a financial institution prefer to offer this type of mortgage?

A: Step 1 A balloon payment is a one-time payment that is bigger than usual at the expiration of the…

Q: Define mortgage securitisation , with a relevent example?

A: Mortgage is a loan agreement between the borrower and the lender, in which the property or real…

Q: How can i get the best mortgage rates ?

A: A mortgage rate is an interplay of various quannd qualitative factors. In order to get the best…

Q: Briefly explain mortgage securitization and how it contributed to the economic crisis.

A: Mortgage securitization is the process of converting the loan into investment as purchasing the bond…

Q: When might a borrower want to have another party assume his liability under a mortgage loan?

A: There are basically two conditions when a borrower might want to have a third party:

Q: What is the break-even mortgage interest rate (BEIR) in the context of financial leverage? Would you…

A: Break-even Mortgage Interest Rate: Break-even mortgage rate states that rate at which financial…

Q: Assuming the borrower is in no danger of default, under what conditions might a lender be willing to…

A: There can be majorly two possibilities under which a lender may accept a lesser amount than that of…

Q: Explain the Factors Important in Mortgage Loan Pricing?

A: Mortgage loan pricing: The process of analysis and arriving at the exact interest rate for a…

Q: In the previous chapter, significant problems about the ability of borrowers to meet mortgage…

A: Introduction: Fixed interest rate charge on mortgage loan is the interest payment program with fixed…

Q: Explain Negative Amortizing, Constant Payment Mortgage (CPM) Loans?

A: Negative amortizing: Negative amortization is a financial concept that refers to a rise in a…

Q: Which of the following situations are likely to result in higher loan defaults?     Mortgages…

A: Loan default implies that borrower is not able to repay debt according to initial predetermined…

Q: What does “assignment” mean and why would a lender want to assign a mortgage loan?

A: Mortgage assignments refer to a document that shows that a mortgage is transferred from the original…

Q: Default risk is generally much greater for commercial mortgage loans than home loans because...

A: In finance default risk refers to that risk in which the borrower will not be able to make the…

Q: Why might a lender prefer a loan with a lower interest rate and a participation?

A: One meaning of loan participation is multiple lenders participating in lending to the same borrower.…

Q: Explain the term Fixed Interest Rate Mortgage (FRM) Loan?

A: Mortgage loans:   The mortgage is a type of loan in which a property or any other real estate is…

Q: What went wrong with Subprime mortgages?

A: Mortgage is the value which is offered by banks and other institutions to the public of firms…

Q: What is MOST TRUE of DEFAULT RISK on a mortgage loan? It is always lower with lower interest rates.…

A: Default risk is the risk that a lender assumes when a borrower fails to make mandatory debt…

Q: Explain the reason why the wraparound lender should be willing to make the loan at a rate that is…

A: Wraparound mortgage is a type of secondary financing in which the seller extends an additional…

Q: Why do adjustable-rate mortgages (ARMs) seem to be a more suitable alternative for mortgage lending…

A: Price level adjustable mortgage (PLAM): Price level adjustable are mortgage loans where the…

Q: What is meant by a “purchase-money” mortgage loan? When could a loan not be a purchase-money…

A: A purchase-money mortgage loan is a loan that home sellers provide to the buyers of the home. Buyers…

Q: e that a friend tells you that you should not rush to pay off your mortgage early because you will…

A: Mortgages are paid by equal amounts of monthly payment that carry the payment of principal amount…

Q: What’s the purpose of the mortgage amortization for investors

A: Amortization is dividing of mortgage loans into series of payments which constitute principal and…

Q: Which of these is NOT likely to lead to more expensive mortgages?

A: 1. A higher origination loan to value ratio indicates that the lender is taking more risk in case…

Q: What are the benefits to the back for amortizing a loan

A: In finance amortized loan is one in which fixed monthly payments are made by the borrower to the…

Q: Explain Junior Mortgages?

A: Junior mortgage: A junior mortgage may be a contract subject to a to begin with or a past contract…

Q: Why might a borrower be willing to pay a higher price for a home with an assumable loan?

A: An assumable loan is a  loan that can be taken over by a purchaser, who may then continue making…

Q: subprime mortgages. Why were mortgage companies aggressively offering subprime mortgages

A: Subprime mortgages are a kind of house loan. These types of loans are provided to poor people, those…

Q: In what ways is a CMBS structure different from a CMO backed by residential mortgages? Why

A: Mortgage-backed securities: The securities that are secured with mortgage or pool of mortgages are…

Q: Explain Reverse Annuity Mortgages (RAMs) loan?

A: Reverse Annuity Mortgage (RAMs): A reverse annuity mortgage is a kind of home loan in which an…

Q: 1. A consumer, who is initially a lender, remains a lender even after a decline in interest rates.…

A: Explanation are as follows for 1 st one .   Note:- as per the guidelines we can we can provide the…

Q: Discuss some of the most elementary terms used in fixed interest rate loans?

A: A loan is referred as the borrowed amount which is procured by the borrower from various financial…

Q: If you were applying for a home mortgage loan today, would a lender viewyour debt-to-assets ratio…

A: Ratio analysis The financial statement of a company are analyzed in order to find profitability,…