Freehold
Financing term
An agreement in which a lienholder agrees their claim will rank behind another lien in priority.
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 broker deposits a client's earnest money into the brokerage's operating account. This violation is called:
Commingling — Commingling is mixing client trust funds with the brokerage's own operating funds. It is a license-law violation even if no client money is ever spent, because it puts trust funds at risk.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
A seller who pays discount points at closing to reduce the buyer's interest rate is using a strategy commonly known as a:
Buydown — Paying discount points to lower the interest rate, whether by the seller or buyer, is called a buydown; each point generally lowers the rate by a fraction of a percent.
Source: PSI National Real Estate Exam Content Outline §4 Financing
A subordination clause in a mortgage or lease:
Allows a lien or interest to be given lower priority than a later-recorded lien — A subordination clause or agreement lets a party voluntarily lower the priority of its existing lien or interest, allowing a later lien, such as a new first mortgage, to take priority instead.
Source: PSI National Real Estate Exam Content Outline §4 Financing
See every term in this area: Financing glossary