Terms Flashcards
7 cards from real Mortgage practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Terms flashcards as text
What is a 'rate lock' in mortgage lending?
Answer: A lender's guarantee to hold a specific interest rate for a set period while the loan is being processed
A rate lock is a commitment by the lender to hold an agreed interest rate for a specified period (typically 30–60 days) while the loan is processed, protecting the borrower from rate increases.
What is 'mortgage seasoning'?
Answer: The length of time a borrower has held a mortgage, often required before refinancing or cashing out equity
Mortgage seasoning refers to the minimum time a borrower must have held a mortgage before being eligible for certain transactions like cash-out refinancing, typically 6–12 months.
What is a 'recourse loan' in mortgage lending?
Answer: A loan where the lender can pursue the borrower's personal assets beyond the collateral if they default
With a recourse loan, if foreclosure proceeds don't cover the remaining balance, the lender can pursue a deficiency judgment against the borrower's other assets.
What is a 'no-doc' or 'stated income' mortgage?
Answer: A loan where borrowers state their income without providing traditional documentation to verify it
Stated income (no-doc) mortgages allow borrowers to declare their income without standard verification documents; they were common before the 2008 financial crisis but are now heavily regulated.
What is the 'primary mortgage market'?
Answer: The market where mortgage loans are originated directly between lenders and borrowers
The primary mortgage market is where borrowers and mortgage lenders come together to originate loans—this is where you apply and receive a mortgage.
What is 'mortgage recasting' (also called re-amortization)?
Answer: Making a large lump-sum principal payment and having the lender recalculate a lower monthly payment over the remaining term
Mortgage recasting allows a borrower to make a large principal payment, then the lender recalculates (recasts) the monthly payment based on the reduced balance over the remaining loan term.
What is a 'satisfaction of mortgage' document?
Answer: A legal document issued by the lender confirming the mortgage has been fully paid off and releasing the lien
A satisfaction of mortgage (also called a discharge or release) is a recorded document the lender provides once the loan is paid in full, releasing the lien from the property's title.