General Mortgage Knowledge
Home Possible Advantage mortgages can be used for a _____ refinance of an existing mortgage
"No cash out"
VA will allow you to go up to _____
$1,000,000
What is the top current up-front mortgage insurance premium for FHA loans?
1.75%
____ is when the loan is due to adjust
Anniversary date
______ refers to a temporary rate reduction usually for 1, 2, or 3 years
Buydown
A borrower must be 70 years or older to qualify for a HECM. True or False?
False
The Federal National Mortgage Association is known as
Fannie Mae
All reverse mortgages that are HECM programs are insured through the
Federal Housing Administration (FHA)
In an adjustable rate mortgage, the _______ changes periodically, usually in relation to an index, and the _______ may go up or down accordingly.
Interest Rate / payment
Line of credit, term, tenure, modified term, lump sum are all ____
Payout options
A ____ is when the real property is measured, and boundaries and area are determined
Survey
VA loans also help eligible ____
Surviving spouses
A VA loan does not require a down payment. True or False?
True
Proposed IRRRL cannot ______ the principle balance, except to the extent of fees and charges allowed by the VA
increase
The VA charges a ____% funding fee to guarantee a loan, which is financed into the loan amount
.5%
The seven things that may be on a house payment are
1. Principle 2. Interest 3. Taxes 4. Insurance 5. Mortgage Insurance 6. Flood Insurance 7. HOA (Home Owners Association) Dues
The payment due is the ____
1st of each month
A loan may not conform to Fannie Mae or Freddie Mac guidelines if the consumer has not been with an employer for more than _____
2 years
Loan documents requires documentation of tax returns for _____ years with a recent pay stub covering the most recent 30-day period
2 years
Sellers can pay concessions of ______% of the purchase price to help buyer pay closing costs
2%-6%
Loan documentation requires full bankruptcy papers IF it occurred within the past ____
2-4 years
Loans without at least __% down payment require some form of credit enhancement or insurance, usually in the form of PMI
20%
Freddie Mac and Fannie Mae product allows for __% down payment
3%
A traditional fixed rate loan is a ____ term
30 year
What is the annual MIP on an FHA loan with less than or equal to 78% LTV
45 bps
All individuals on the title must be ____ or older
62 years
____% of seniors aged between 62-100 own their homes
80%
An _____ limits the amount your monthly payment may increase at the time of each adjustment
ARM
The most common types of loans used in Conforming Lending are:
Adjustable Rate and 30 & 15 year Fixed
USDA loan considers the income(s) of
All members of the family
If the ________ is significantly higher than the initial rate, then it is likely that your rate and your payments will be a lot higher when the loan adjusts, even if general interest rates remain the same
Annual Percentage Rate (APR)
FHA does not require an ______ on a streamline refinance
Appraisal
_____ is only required if rolling in the closing costs and the loan amount is greater than their previous note amount plus new UFMIP
Appraisal
For the ______ the home repairs can be funded through the loan. Also, all _____ may be funded through the loan as well
Appraisal Process / closing cost
A _____ is a lump sum payment due at the end of a loan which does not amortize completely
Balloon
______ must be up to date on any federal debts
Borrower
It is the _______ responsibility to maintain homeowner's insurance
Borrower's
______ is a payoff of the outstanding mortgage(s) where all the loan costs and additional funds needed to achieve the goals of the loan are usually added into the new loan.
Cash-out Refinance
COE stands for
Certificate of Eligibility
Mortgage Loans will fall into 2 general categories:
Conventional and Government
_______ is required on all loans prior to appraisal or title work
Counseling
The _______ does not need to be checked for streamline refinance, but the lender must review the LDP List and the GSA
Credit Alert Interactive Voice Response System
_______ payments are equal to monthly payments disbursed to the borrower for as long as they live or as long as they occupy the property. Which of the following is a cost of a HECM? a. Mortgage insurance premium (MIP) b. Origination fee c. Servicing fee D. All of the above
D. All of the above
A _______ is a permanently lower interest rate
Discount point
If the initial rate on the loan is less than the fully indexed rate, it is called a __________
Discounted index rate
Reverse mortgage details _______ until borrowers move out, sell their home, or pass away.
Do not require repayment
If the mortgagers claim he or she lives alone, that fact must be ______
Documented
VA loan limits follow _____ guidelines
Federal Housing Finance Agency
The ____ is waived if a veteran has a service related disability
Finding
The Home Possible Advantage mortgage is for low and moderate income borrowers with limited savings, including ______
First-time homebuyers
The Federal Home Loan Mortgage Corp is known as
Freddie Mac
Federal Housing Administration (FHA) loans are
Fully documented
The ________ is equal to the margin plus the index
Fully indexed Rate
The Veteran's Affairs Home Loans are very similar to FHA loans except that VA loans _____
Guarantee the loan amount instead of insuring.
The 3rd part of the _________ is to set up an appointment with HUD approved Housing Counselor
HECM Process
HECM stands for
Home Equity Conversion Mortgage
What type of ARM is advertised as a 3/1 or 5/1 ARM?
Hybrid ARM
For a VA-IRRRL _________ may not need to be required
Income documentation
For loans that are not exempt from ________, the lender must complete all the following: verify income according to standards set for in Reg Z
Income verification requirements
An _____ is the cost of the money charged with the margin
Index
The _____ is a measure of interest rates generally, and the _____ is an extra amount that the lender adds
Index / margin
The __________ contains all the same forms that the borrower will sign at closing
Initial disclosure package
Index is used to calculate ____
Interest rate
An _____ ARM payment plan allows you to pay only the interest for a specified number of years
Interest-only
The Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) eliminated ______
Interest-rate caps
The downside to a Buydown is that ____
It may be costly
The Buydown fee is paid to the _____
Lender
A _______ limits the interest-rate increase over the life of the loan
Lifetime cap
______ is calculated by appraised value of home or maximum lending limit, age of the youngest borrower, current interest rate.
Loan amount
_______ available to the borrower are based on 3 main factors: age of homeowners, value and location of the home, and current interest rates
Loan proceeds
The refinance of an FHA insured loan must ____ the principle and interest payments of the previous mortgage payment
Lower
A _____ is the profit charged on top of the index
Margin
A _______ payment may be less than the amount of interest due that month and may not reduce the amount the borrower owes on their mortgage
Minimum (or limited)
The _____ is a payment less than paying the interest due
Minimum monthly payment
To establish _________ on a streamline, refinance the new mortgage payment must be at least __% lower than the mortgage payment (P&I and MIP) of the loan being refinanced
Net Tangible Benefit / 5%
A ______ loan is one that doesn't fit into Fannie Mae or Freddie Mac guidelines
Non-conforming loan
What type of ARM allows the borrower to choose among several different payment options each month?
Payment-option ARM
A _______ limits the amount the interest rate can adjust up or down from one adjustment period to the next after the first adjustment
Periodic adjustment cap
_______ is the max a rare can increase over a defined period of the loan
Periodic cap
A VA loan does not have a ______ insurance requirement
Premium
Veteran's Affairs Home Loans are provided by ____ lenders
Private
To qualify for ______, the IRRRL loan may be exempt from income verification (or not) but must meet all other VA requirements for guaranteeing an IRRRL
QM status
The ____ is the interest rate the borrower pays
Rate
Rate/Term Refinance is simply a change in either the ____ (lower) or the ____ (shorter)
Rate / Term
_____ are the funds remaining after closing
Reserves
A unique loan product that enables senior homeowners to convert part of the equity in their homes to income without having to sell the home, give up the title, or take on new monthly mortgage payments is a
Reverse mortgage
To be in the _______, an IRRRL must also: be at least 6 months after the loan it is refinancing, veteran must have not been 30 days past due during the 6 months before IRRRL's closing date, the recoupment period for all fees and charges must not exceed 36 months
Safe harbor
Alternative Mortgage Transaction Parity Act of 1982 (AMTPA) eliminated ______ that banks could charge on mortgages
State rate caps
______ Loans are gone
Sub Prime Loans
______ Loans were originally designed for borrowers who had less than perfect credit. *these loans are gone now but may resurface*
Sub Prime Loans
__________ should be paid off with the loan but can be subordinated
Subordinate liens
The period between rate changes is
The adjustment period
A Streamline Refinance is designed to lower the monthly principal and interest payments on a current FHA insured mortgage and can involve no cash back to the borrower. True or false?
True
A borrower on a HECM loan is required to pay real estate taxes, insurance and flood insurance. True or false?
True
Negative amortization means that the amount the borrower owes increases even even you make all your required payments on time. True or false?
True
Payment shock can occur if the borrower's mortgage payment rises sharply at a rate adjustment. True or false?
True
Veterans can reuse their benefit. True or false?
True
If exempt from income requirements, original loan and IRRRL must satisfy all other _____
VA requirements
VA loans can be used to: a. Buy a home b. Build a home c. Simultaneously purchase and improve a home d. All of the above
d. All of the above
The VA-IRRRL is made as an ______ pursuant to a program administered by the Housing Finance Act
extension of credit