Non traditional mortgages overview

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Assuming that there is no life interest rate, the index goes from 2% to 10% then an annual rate of an ARM will increase by?

0.08

For the HECM Program the loan will be due and payable when the borrower no longer occupied the property for

12 mo

For the HECM Program the loan will be due and payable when the bar were no longer occupies the property for

12 months

Assuming a property was sold for 131,500 the mortgage is a standard 203B loan the borrower makes the minimum contribution of 3.5% but does not wish to pay the AFMIP Upfront and annual him up he is 1.15% of the monthly MIP will be

122.83

Compare a five year interest only loan with a principal balance of $100,000 and an interest rate of 4.875 and a 30 year fixed rate loan with the same terms what is the payment difference between the 30 year and the interest only the first five years

123.00

Which product has the most payment shock

15. Year balloon

How many general types of bad downs are available to borrowers

2

How many general types of by downs are available to borrowers

2

If interest rate rises 15 years after the closing of a mortgage which mortgage borrower is not affected

30 year FRM borrowers

The acronym 30 Yr FRM Stands for

30 year fixed rate mortgage

The following are all examples of non-traditional mortgage is except for

30 year fixed rate mortgage

A foreclosed property sold for $300,000. The borrower originally put down $20,000 down payment the first lien mortgage due is 250,000 the second lane due is 40,000 how much were the second lien mortgage lender recover

40,000 Minus any additional cost incurred by the first lienholder

Five year interest only loan with a principal balance of $100,000 and an interest rate of 4.875% has a monthly interest payments of

406.00

A Linder might be permitted to requalify a borrower if, compared to the original interest-rate, the current interest-rate is typically greater than

5 Percentage points

A 30 year fixed rate loan with a principal balance of $100,000 and an interest rate of 4.875 has a monthly payment of

529.00

830 year fixed loan with a principal balance of 100,000 and it interest rate of 4.875 has monthly payments of 529 after five years the interest-rate is still 4.875. What is the payment on a five year interest only with the same terms after the interest only has ended

577

If a borrower paid $1500 to buy down the interest rate and save $25 in interest payments each month the borrower will recoup the original 1500 in

60 months

Assuming that there is no life interest The index goes from 2% to 10% then the interest rate of an arm will increase by

8

In a NegAm , If the interest due is $1739 and the payment is $867 the amount added to the principal will be

872

The following statement about balloon mortgages are all accurate except

A borrower is guaranteed refinance because the lender is obligated to offer new terms at the end of a mortgage period.

FRM Stands for

A fixed rate mortgage

What is a prerequisite for qualifying for a Reverse mortgage

A homeowner must live in their home

What is pre-requisite for qualifying for a reverse mortgage

A homeowner must live in their home

Any mortgage product other than a 30 year fixed rate mortgage is known as what according to the safe act

A non-traditional mortgage

Any mortgage product other than a 30 year fixed mortgage is known as

A non-traditional mortgage product

What prevents an estate left two errors from owing 110% of their LTV

A nonrecourse clause

Discount points often refer to

A permanent down payment

What is a home equity conversion mortgage

A reverse mortgage insured by the government

A charge sometimes assessed on a re-financing only when the borrower pays their mortgage off prior to maturity date is known as

A soft pre-payment penalty

Which of the following is generally not a factor in how much money A customer can borrow or under the HECM program

Annual income

Which of the following is generally not a factor in how much money a customer can borrow under HECM program

Annual income

Which of the following is generally not a factor in how much money a customer can borrow under the HECM program?

Annual income

I piggyback loan can help

Avoid the mortgage insurance payment even if the borrower does not have 20% down

Benefits of the construction to permanent loan include the fact that

Borrower can purchase a rate lock

The home equity line of credit has a mortgage principal balance that

Can fluctuate through time

$100,000 five-year negative AM Has an initial rate of 2.875 rate is 4.875 if the borrower makes The initial payments for five years they

Can increase the loan balance

Which of the following is not true in regards to proprietary reverse mortgages

Can only be used for one purpose

What is a benefit of taking out a construction to permanent mortgage

Can use a rate lock to bridge the loans

Which of the following statements is not true

Construction loans are intended to be used for long-term

Appraisers do not use which of the following in determining the after completion value on a construction loan

Current value of the home

The following are all reasons why property prices fell into thousand and eight the beginning of the mortgage crisis except for

Demand for new housing purchases had been satisfied

The following are all reasons why property prices fell into thousand eight, beginning of the mortgage crisis except for

Demand for new housing purchases had been satisfied

When did adjustable rate mortgage is, ARM, gain regulatory approval

Early 1980s

The following were all consequences of the low interest-rate monetary policy between 2002 and 2006 except for

Financial institutions struggled to make profits because the cost of borrowing was so low

FRM stands for

Fixed rate mortgage

The amount a borrower I was on a reverse mortgage

Generally increases over time

What is a prerequisite for qualifying for a reverse mortgage

Homeowner must live in their home

If the index rate goes up then the arm rate will

Increase

In general, if the index rate goes up the arm rate will

Increase

Reverse mortgage homeowners must be aware of

Interest is added to their mortgage principal

Reverse mortgage homeowners must be aware that

Interest is added to their mortgage principal

Where does the buydown payment go

Into an escrow account

Interest own a construction loan

Is charged on the amount of money disbursed

The initial interest rate on an ARM is

Known as a teaser rate

What higher return does an ARM provide for the increased risk the borrower takes on?

Lower interest payments

What higher return does an arm provide for the increased rest of the borrower to take

Lower interest payments

If interest rates go up significantly and inflation does not increase which of the following is likely to result

More borrowers will default

The process by which the principal amount due on a mortgage increases is known as

NegAm

The difference between a balloon and a fixed rate mortgage is

One has longer maturity date

If interest rates are significantly higher than the note right add a balloon's maturity the borrower will have to

Pay back the original mortgage if the original Linda refuses to refinance the mortgage

If interest rates are significantly higher than the note rate and a balloon's maturity the borrower will have to

Pay back the original mortgage if the original lender refuses to refinance

What borrow her profile is best suited for a Negam Loan

People with once a year bonuses, can manage for small businesses, savvy investors

Discount points are Often referred to

Permanent buy down

If interest rates are significantly higher than the note right at a balloon's maturity the borrower must have to

Play back the original mortgage if the original lender refuses to refinance the mortgage

Some interest only loans offer teaser rates with an initial introductory period. To manage the payment shark after the interest only., Homeowners can

Pre-pay their principal in the same amount as the equity portion of a fixed rate mortgage

Reverse mortgage borrowers are responsible and paying which of the following throughout the course of the loan in order to not risk having the loan become due and payable

Property taxes

In a reverse mortgage, the lender

Provides mortgage payments to the borrower

In a reverse mortgage the lender

Provides mortgage payments to the homeowner

Which of the following is not a way that a reverse mortgage can provide income to borrow ours

Quarterly payments based on an index

Though It comes with greater risk, a 15 year balloon mortgage can be used to

Reduce down payment as a second lien

A piggyback loan helps

Reduce the mortgage insurance payment even if the borrower does not have 20% down

What should and MLO advise potential reverse mortgage borrowers with regards to taxes

Reverse mortgage payments are nontaxable but the owner should confirm with tax specialist

What should and MLO advise potential reverse mortgage borrowers with regard to taxes

Reverse mortgage payments or non-taxable but the borrower should confirm with tax specialist

Which Mortgage type generally has a higher interest-rate

Second mortgage

The margin on an arm usually

Stay consistent during the life of the loan

Throughout the life of an arm, the margin

Stays the same

What happened to the housing market in 2002 to 2006 when the mortgage interest rates were low

Supply of alternative mortgage loans increased, home values sword to record levels, homebuyers increased their level of risk taking behavior when purchasing a home

What is a non-traditional mortgage

The SAFE Act Defines a non-traditional mortgage product as a mortgage loan that differs from a 30 year fixed mortgage

A piggyback can possibly reduce the mortgage payment if

The borrower can avoid a jumbo mortgage

I piggyback loan can possibly reduce the mortgage payment if

The borrower can avoid a jumbo mortgage

What is the interest rate charged on a second mortgage higher than that chart on a first mortgage

The borrower is more likely to default on a second mortgage then I first mortgage

Completion of a home under construction means

The certificate of occupancy has been issued for the property

Hey lender may refuse to refinance a balloon mortgage in the following circumstances except if

The current interest-rate is 10% higher than the original interest-rate

Banks and savings institutions first introduced a variety of alternative mortgage products in

The early 1980s

I land owner building a house. Wants to take out a construction loan but is low on cash and is discouraged by high down payment. What is something the landowner may be missing

The land value can be considered as equity towards the down payment

Which of the following statements about fully immature as payments is true

The payments will cover all outstanding interest. The balance will be allocated to decrease the principal

Homebuyers intending to remain in their homes for only a few years would benefit from a an arm if

They can afford the risk

A landowner building a house wants to take out a construction loan but is low on cash and is discouraged by high down payment.What is something the land owner may be missing

They land value can be considered as equity towards the down payment

Why would a borrower need a second mortgage

To help pay for the down payment

Which one is not a typical reason to get a second mortgage

To pay back the first lein mortgage

A temporary buydown mortgage is not used

To reduce the mortgage taxes and insurance

A piggyback loan Can be

Two loans, one of which is a second lein

I piggyback Can be

Two loans, one of which is a second lein

A construction loan is

Used by borrower is building their own home or purchasing a home under construction

Construction loan Interest rates are usually

Variable and have an interest only feature

Construction loan interest rates are usually

Variable and have an interest only feature


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