1 / 6

Chapter 22 – Residential Mortgage Market

Chapter 22 – Residential Mortgage Market. BA 543 Financial Markets and Institutions. Chapter 22 – Mortgage Market. Property Backed Loans Residential Loans Commercial Loans Process Originators Origination Fee – Points Servicing Fee PTI – Payment to Income LTV- Loan to Value.

kiana
Download Presentation

Chapter 22 – Residential Mortgage Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 22 – Residential Mortgage Market BA 543 Financial Markets and Institutions

  2. Chapter 22 – Mortgage Market • Property Backed Loans • Residential Loans • Commercial Loans • Process • Originators • Origination Fee – Points • Servicing Fee • PTI – Payment to Income • LTV- Loan to Value

  3. Chapter 22 – Mortgage Market • Commitment Letter • Offered by Originator • Borrower has options • Lock in date of interest rate • At Loan Application • At Letter Acceptance • At Closing • Pays a fee to Originator for Option • Conforming vs. Non-Conforming Loans • Federal Sponsored Agency Requirements

  4. Chapter 22 – Mortgage Market • Mortgage Designs • Traditional – Fixed Rate and Equal Payments for Life of Loan • Amortized • Fully Paid at the End • No Prepayment Penalty • Adjustable Rate Mortgages (ARMs) • Balloon Resets (Promised Funds with varying Rates over Life of Mortgage) • Graduated Payment, Price-Level, & Duals

  5. Chapter 22 – Mortgage Market • Non-Conforming Loans • Alt-A • Borrower can not meet qualifying standard • Example, self employed and short on PTI • Subprime Loans • History of bad credit • Recent “catastrophic” event (medical) • Commercial Loans • Based on income from the property not from the individual • Prepayment Protection

  6. Chapter 22 – Mortgage Market • Example of a Traditional Loan • Process, Rates, Payments • Prepayments • Moving, Refinancing • Foreclosure • Missed Payments • Insurance (PMI) • Amortization Schedule • Interest paid in arrears • EXCEL SPREADSHEET - CALCULATOR

More Related