Freehold
Financing term
The lender's process of evaluating a borrower's creditworthiness and the property's value to approve a loan.
This term belongs to Financing. The questions below are real items from Freehold's bank that use it - each one cites its source.
Every Freehold question shows why the right answer is right — and cites its source.
A conventional loan that meets Fannie Mae and Freddie Mac underwriting guidelines and loan limits is called a:
Conforming loan — Conforming loans meet the size limits and underwriting standards set by Fannie Mae and Freddie Mac so they can be purchased on the secondary market; loans above the limit are jumbo loans.
Source: PSI National Real Estate Exam Content Outline §4 Financing
The lender's activity of collecting payments, maintaining escrow accounts, and handling payoffs after a loan closes is called:
Loan servicing — Loan servicing covers the ongoing administration of a loan after closing, including collecting payments, managing escrow accounts for taxes and insurance, and handling default or payoff processing.
Source: PSI National Real Estate Exam Content Outline §4 Financing
In mortgage underwriting, the three C's traditionally used to evaluate a loan application are:
Credit, capacity, and collateral — Underwriters traditionally evaluate credit for payment history, capacity for ability to repay, and collateral for the property's value when deciding whether to approve a loan.
Source: PSI National Real Estate Exam Content Outline §4 Financing
See every term in this area: Financing glossary