Course 3 Lesson 5: Subordinate Leasing
Your borrowers are purchasing a home for $575,000. They are requesting a $431,250 first mortgage and a $57,500 HELOC. What is their LTV, Second Mortgage LTV and down payment if structured this way?
ANSWER: 75/10/15
Your borrowers are purchasing a home for $243,000. They are requesting a $194,400 first mortgage and a $24,300 HELOC. What is their LTV, Second Mortgage LTV and down payment if structured this way?
ANSWER: 80/10/10
Your borrowers are purchasing a home for $350,000. They are requesting a $280,000 first mortgage and a $35,000 HELOC. What is their LTV, Second Mortgage LTV and down payment if structured this way?
ANSWER: 80/10/10
A subordination agreement is required on every loan that has secondary financing.
ANSWER: False
When a second mortgage is obtained at the same time as a first mortgage, there are never any closing costs associated with the second.
ANSWER: False
Which one is not a characteristic of a true second mortgage?
ANSWER: Fixed prepaids
What is another name for a true second mortgage?
ANSWER: Fixed-rate second
Which type of second mortgage does this paragraph describe? This second mortgage works like a credit card. It will provide for a maximum loan amount that may or may not be fully disbursed at closing. This type of second mortgage usually has a variable interest rate, such as prime plus zero. There will normally be a draw period as well as a specific amount of time in which the loan must be completely repaid.
ANSWER: Home equity line of credit
When calculating the payment for an equity line of credit, what is typically calculated?
ANSWER: Interest-only payment
In the marketplace, subordinate financing is often referred to by other names. Which name below does not apply?
ANSWER: Investment mortgage
Most lenders offering second mortgages utilize private investors that have more restrictive guidelines than agency loans. Therefore, your AUS findings will not always be valid for both loans.
ANSWER: True
Second mortgages are typically credit score sensitive.
ANSWER: True
Simultaneous is the term used when the second mortgage closes at the same time as the first mortgage which is typical of a purchase transaction.
ANSWER: True
Stand-alone is the term used when a second mortgage is being obtained separately from a first mortgage.
ANSWER: True
