Finance 8-10
Anyone can assume a VA loan if the loan was obtained prior to...?
1988
What is the minimum down payment required on an FHA insured loan for a residential investment property...?
20 percent (%)
FHA insured loans require a minimum down payment of...?
3.5 percent (%)
The taking of a title to property by a grantee wherein the grantee assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property is known as...?
Assumption of mortgage
A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.
Chain of Title
Title that is encumbered or burdened with defects is known as...?
Clouded title
A fact, imputed to a person by law, which should have been discovered because of the person's actual notice of circumstances and the inquiry that a prudent person would have been expected to make.
Constructive Notice
The FHA is under the supervision of...?
HUD
A duplex house includes how many dwelling units...?
2
What is the most commonly used term on residential mortgages...?
30 years
What is the maximum front-end debt ratio for an FHA insured loan...?
31 percent (%)
What is the maximum interest rate change over the life of a VA adjustable rate mortgage...?
5 percentage points
According to FHA guidelines, the seller can contribute up to ...........of the sales price towards the buyer's closing costs?
6 percent (%)
FHA insured loans require which of the following...?
A careful review of the loan application
A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title, is known as...?
Abstract of title
Express or implied knowledge of a fact.
Actual Notice
This is a written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a transaction, as to the market value of an adequately described property, as of a specific date...?
Appraisal
Something that has value is known as a/an...?
Asset
The taking of a title to property by a grantee wherein grantee assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property, becoming a co-guarantor for the payment of a mortgage or deed of trust note.
Assumption of Mortgage
Under the Uniform Residential Loan Application, which of the following is considered an asset for the borrower...?
Cash deposits
The down payment for an FHA insured loan may be paid using which of the following...?
Cash from the borrower A gift received by the borrower from a family member A grant received by the borrower
What must be obtained in order to qualify for a VA loan...?
Certificate of Eligibility
When applying for a VA loan, the maximum value of the property is established by which of the following...?
Certificate of Reasonable Value
Which of the following is used as an appraisal for a VA loan...?
Certificate of Reasonable Value
Title that is encumbered or burdened with defects.
Clouded Title
Which of the following is an example of a credit bureau...?
Equifax Experian TransUnion
HUD is responsible for overseeing which of the following...?
FHA
A mortgage loan in which payments are insured by the Federal Housing Administration.
FHA-Insured Loan
A mortgage loan in which payments are insured by the Federal Housing Administration is known as a/an...?
FHA-insured loan
Which of the following was created under the National Housing Act of 1934...?
Federal Housing Administration
The Servicemen's Readjustment Act is also known as the...?
G.I. Bill
A number which, times the gross income of a property, produces an estimate of value of the property.
Gross Rent Multiplier
VA loans are .............should the borrower default on their payments?
Guaranteed
What is the minimum down payment required on a VA loan...?
Guaranteed
One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate.
Income Capitalization Approach
Monies that are owed are considered...?
Liabilities
Which of the following is added to PITI...?
MIP
What information about the borrower must be included on the Uniform Residential Loan Application...?
Marital status
Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept is known as...?
Marketable title
A one-time premium paid on FHA-insured loans at the closing, which is pursuant to the purchase is known as...?
Mortgage insurance premium
The HUD section 203 insures FHA loans for which of the following...?
One to four family homes
Which of the following is an example of a liability...?
Outstanding loan balance
Assets minus liabilities equals an individual's...?
Positive net worth
A property's NOI divided by the capitalization rate, equals the...?
Purchase price
One of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions.
Sales Comparison Approach
One of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions is known as the...?
Sales comparison approach
FHA loans may be insured by which of the following HUD programs...?
Section 203b Section 203k Section 251
VA loans allow up to 4% in ................towards the buyer?
Seller concessions
VA loans were created under the...?
Servicemen's Readjustment Act
A Uniform Residential Loan Application gets filled out by which of the following...?
The borrower
An underwriter will review which of the following...?
The borrower's credit report The borrower's income statements The borrower's bank statements
Mortgage insurance premium primarily benefits which of the following...?
The lender
The objective of the Uniform Residential Loan Application is to identify which of the following...?
The property The borrower The loan amount requested by the borrower
Home improvement loans are covered under what HUD title loan program..?
Title 1
Insurance to protect a real property owner or lender up to a specified amount against certain types of loss is known as...?
Title insurance
When a borrower applies for a loan, they typically fill out which of the following...?
Uniform Residential Loan Application
The value derived from the use of something is known as...?
Value-in-use
An individual at a lending institution who determines credit worthiness in order to qualify an applicant for a loan is known as a/an...?
Underwriter
An individual at a lending institution who determines creditworthiness in order to qualify an applicant for a loan.
Underwriter
The criteria with which a lender determines the credit worthiness in order to qualify them for the loan.
Underwriting
The upfront fee for MIP is what percent of the loan amount...?
1.75 percent (%)
A written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date. It is supported by the presentation and analysis of relevant market information. An opinion of value.
Appraisal
An exterior description of the subject property is listed under what section of the Uniform Residential Appraisal Report...?
Improvements
The maximum debt-to-income ratio for a VA loan is...?
41 percent (%)
The ability to deduct expenses on improvements made to income producing property.
Depreciation
Which of the following is an example of a long-term liability...?
Liens Child support Taxes
A one-time premium paid at the closing pursuant to the purchase.
Mortgage Insurance Premium (MIP)
In order to be eligible for a VA loan, the borrower must satisfy which of the following conditions...?
Must have served at least 90 consecutive days during wartime
What is the primary duty of the FHA...?
Stimulate new jobs Stabilize the mortgage market Facilitate the financing of repairs, additions, and sales of existing homes
What is the maximum interest rate change in any one year of a VA adjustable rate mortgage...?
1 percentage point
Loans that were originated prior to ........are generally assumable?
1989
Mortgage insurance for one to four family homes is covered by which HUD section...?
203b
Lenders will generally loan up to ........a Veteran's available entitlement without a down payment?
4 times
What is the maximum back-end debt ratio for an FHA insured loan...?
43 percent (%)
A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.
Abstract of Title
Which of the following must be resolved by the borrower before an underwriter can process a loan...?
Any outstanding judgments
When applying for a VA loan, the Certificate of Reasonable Value essentially serves as the...?
Appraisal
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes.
Appraiser
The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income. Capitalization Rate = NOI / Purchase Price
Capitalization Rate
This is the rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income...?
Capitalization rate
A history of conveyances and encumbrances affecting the title of a property, which is used to determine how title came to be vested in current owner, is known as...?
Chain of title
One of three methods in the appraisal process. An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.
Cost Approach
This is an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land...?
Cost approach
The ability to deduct expenses on improvements made to income producing property is known as...?
Depreciation
When qualifying a borrower, the lender will do which of the following...?
Determine the ability of the borrower to repay Estimate the value of the property being used as collateral Research and analyze the marketability of title
The 'Site' section of the Uniform Residential Appraisal Report includes which of the following information...?
Dimensions of the subject property
One of the three major valuation methods, which determines the value of a property by applying a capitalization rate to a property's net operating income is known as the...?
Income capitalization approach
The 'Subject' section of the Uniform Residential Appraisal Report includes which of the following information...?
Legal description of the property
The Uniform Residential Loan Application includes which of the following information...?
Legal description of the property Names of the borrower and co-borrower The requested loan amount
According to the sales comparison approach, if the comparable sale #1 includes a garage, and the subject property does not, what type of adjustment needs to be made...?
Negative adjustment
The annual income generated by an income-producing property after taking into account all income collected from operations, and deducing all expenses incurred from operations.
Net Operating Income
Which of the following parties is allowed to work with a lender's underwriter in an effort to get the borrower approved...?
No party is allowed to work directly with the underwriter
An FHA loan used for the purchase and rehabilitation of an owner-occupied house may be insured by which HUD program...?
Section 203k
Insurance for adjustable rate mortgages are covered under what HUD program...?
Section 251
Which of the following properties may be purchased using a VA loan...?
Single family homes Condominiums Cooperatives
A document which precisely shows the property lines and size and location of improvements on a particular property.
Survey
A document which precisely shows the property lines, and size and location of improvements on a particular property, is known as a...?
Survey
The HUD section 203k program is NOT available for real estate investors...?
T (True)
Insurance to protect a real property owner or lender up to a specified amount against certain types of loss (ex: defective or unmarketable title).
Title Insurance
Which of the following is used at the start of the loan application process...?
Uniform Residential Loan Application