(Chapters 9 & 10 Reflection Summary) – Harmonize
BRE 126-Real Estate Finance
Samantha
3-11-2024
Huber, W.
Chapters 9 & 10
Overview
Chapter 9 for Real Estate Finance covers concept, Conventional Looans.(p.227). Chapter 10 covers Alternative Financing and consist of 10 concepts: Discount Points, Buydown Plans, FNMA/FHLMC Limits on Buydowns, Adjustablerate Mortagages(ARM), The Growth Equity Mortgage (GEM), Reduction Option Mortgage, Biweekly Loans, Home Equity Conversion Mortgages (reverse mortgage), Shared Appreciation Mortgages and Hard Money Makers and Arrangers. (p. 252).
Key Concept from Chapter 9
One of the key concepts I learned about in this chapter is about the conventional prepayment penalties which is if you pay off your conventional loan early there is a penalty applied which tries to discourage you not to pay it off early so that the lender can continue to receive monhly mortgage payments from the borrower which makes the lender more money in the long run so if you pay off early lender will charge more interest and penalty fee to pay off. Good for the lender they are there to make money. I say always go for an adjustable rate, period, which might have payoff fee also but not so much plus with a fixed your mortgage payment won’t go up to much if needed.(p.245).
Key Concept from chapter 10
Another concept in this chapter I learned is Discount Points. Discunt Points is prepaid interest, money payments made at the same time of the loan origination that lets the borrower pay a less interest rate than originaly offered. (p.254). Which is cool but doesn’t perhaps make much difference in the long run.
Key Concept from Chapter 9
Another key concept from chapter 9 I learned of is Secondary Financing; when the purchaser borrows money from another source to help pay a little on the down payment or settlement cost. If the owner plan to occupy the house then they need 5% down payment and the first and second mortgage must not exceed ninety five percent of the sale price or the appraised value whichever is less. (p. 232).
Summary
by Samantha Thompson
Chapter 9 & 10 are great tools for Real Estate Finance. They cover what is needed to become a real estate agent, broker etc.. and a big help to prep you for the real estate exam. Great concepts!
