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