How Well Do You Know The Language Of Property Investment?

The explanation for the given correct answer is that a mortgage does represent a portion of the total value of the real estate. The loan to value ratio is a financial phrase that expresses the relationship between the loan amount and the value of the property. Therefore, it is true that the mortgage represents a portion of the total value of the real estate.

A mortgage is a legal document that is used to obtain a loan for the purpose of purchasing real estate. It serves as a security for the lender, as it gives them the right to take possession of the property if the borrower fails to repay the loan. Therefore, the statement "Legal documents through which a loan is obtained to purchase real estate is called a mortgage" is true.

A mortgage is a loan provided by lenders to borrowers, typically for the purpose of purchasing a property. Lenders charge interest on the borrowed money as a way to make a profit. The interest is calculated based on the principal amount, which is the initial sum borrowed. Therefore, the statement that a mortgage is provided by lenders who charge interest and the amount is known as the principal is true.

Appreciation refers to the increase in value or worth of something, which can be attributed to economic factors like supply and demand. This increase can either be permanent or temporary.

When used in the context of a home purchase, amortization is the process by which loan principal decreases over the life of a loan, typically an amortizing loan. With each mortgage payment that is made, a portion of the payment is applied towards reducing the principal, and another portion of the payment is applied towards paying the interest on the loan.

Deduction refers to the amount of money that is subtracted from an individual's income when calculating their federal income tax. This deduction helps to reduce the taxable income, resulting in a lower tax liability. Therefore, the correct answer is "An amount of money subtracted from income when calculating federal income tax."

Consideration refers to something of value that is given by one party to another as a part of a contract. It can be in the form of money, goods, services, or even a promise to do or not to do something. It is an essential element of a contract and signifies the acceptance and acknowledgement of the agreement between the parties involved. In this context, consideration is the most appropriate answer as it aligns with the definition provided.

A counteroffer refers to the act of rejecting an initial offer to buy or sell something, while simultaneously proposing a substitute offer. It indicates a change in the terms or conditions of the original offer, typically in response to dissatisfaction or a desire for different terms. This allows the parties involved to negotiate and potentially reach a mutually agreeable agreement.

If demand is constant and supply increases, sellers complete with each other by lowering prices.

In accounting, when a liability or equity is entered in a party's favor, it is recorded as a credit. This means that the party is receiving a benefit or an increase in their financial position. Credits are used to record increases in liabilities, equity, and revenue accounts, while debits are used to record decreases in these accounts. Therefore, in this context, the correct answer is credit.

The mortgage application fee is paid by the borrower at the time of mortgage application is usually non refundable.

Assignment is the correct answer because it refers to the act of transferring the rights and obligations of a contract to a third party without canceling the contract. This is commonly done when one party wants to transfer their contractual obligations to another party, allowing the new party to step into the original party's shoes and fulfill their obligations.

Fee simple title is not necessarily free of loans or other emcumbrances

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This practice is called usury, there is no usury limit on most mortgage loans. Investors need to be mindful to compare mortgage interest rates between lenders.