Chapter 13
What is a VA guaranteed mortgage?
A veterans eligibility is shown on a certificate of eligibility that is obtained from the VA. A veteran must serve a specified minimum amount of time to be eligible and honorably discharged.
What is an annual mortgage insurance premium (AMIP)?
AMIP is 0.85% of the annual outstanding FHA loan balance divided into 12 monthly payments. It must be paid for the life of the loan and cannot be cancelled.
What is specific about conventional loans?
Conventional loans are more risky that FHA/VA since there are no guarantees or they are not insured.
What are FHA mortgage insurance premiums?
FHA mortgage insurance premiums is required on all FHA insured mortgage loans, regardless of the down payment. It cannot be cancelled and must be paid for the life of the loan.
VA guaranteed mortgage loans set a limit on the maximum loan amount?
It does not, the actual amount borrowed may be more than the guaranteed entitlement if the veteran otherwise qualifies for the loan.
What is the purpose of the VA mortgage loan program?
It guarantees permanent long term mortgage loans that are originated by VA approved lenders for owner occupied residences.
What is FHA up front mortgage insurance premium UFMIP?
It is paid at the time of closing of the loan, although all or a portion of mortgage insurance premium may be financed. 1.75 in most cases and can be paid by borrower, seller or 3rd party
What is usury?
Limiits the interest rate that may be charged for a loan. Lenders may not charge an interest rate of more than 18% on loan amounts up to 500,000.00
What is PMI-Private mortgage insurance
PMI is a fee charged by the lender that the borrower pays to offset the increased risk of a conventional mortgage loan to the lender. It protects lender not borrower.
What statement is true about a Section 203 (B) FHA insured mortgage loan?
The interest rate of a FHA insured mortgage loan is determined by negotiation between the lender and the borrower. Interest rates are established by supply and demand in the marketplace.
What does FHA section 203 (b) Mortgage insurance cover?
The program provides basic mortgage insurance for the purchase or refinance of owner/occupied one to four family properties. FHA 203 K enables homeowners to finance both the purchase of a one to four faimily dwelling and it's cost of rehab.
Federal Housing Administration (FHA) does not do?
The purpose of the mortgage insurance is to protect the lender (NOT the borrower) from loss in the event of foreclosure.
