Texas Real Estate Finance - Chapter 8

The borrower

A Uniform Residential Loan Application gets filled out by which of the following...? The borrower The broker The seller All of the above

FHA-insured loan

A mortgage loan in which payments are insured by the Federal Housing Administration is known as a/an...? Conventional loan VA loan FHA-insured loan Non-conforming loan

Mortgage insurance premium

A one-time premium paid on FHA-insured loans at the closing, which is pursuant to the purchase is known as...? Private mortgage insurance Home warranty Mortgage insurance premium Title insurance

Underwriter

An individual at a lending institution who determines credit worthiness in order to qualify an applicant for a loan is known as a/an...? Mortgage broker Appraiser Mortgage banker Underwriter

All of the above

An underwriter will review which of the following...? The borrower's credit report The borrower's income statements The borrower's bank statements All of the above

1988

Anyone can assume a VA loan if the loan was obtained prior to...? 1988 1991 2001 2009

3.5 percent (%)

FHA insured loans require a minimum down payment of...? 3.5 percent (%) 6.5 percent (%) 15 percent (%) 25 percent (%)

A careful review of the loan application

FHA insured loans require which of the following...? A careful review of the loan application A property inspection by a licensed engineer A 10% minimum earnest money deposit All of the above

All of the above

FHA loans may be insured by which of the following HUD programs...? Section 203b Section 203k Section 251 All of the above

FHA

HUD is responsible for overseeing which of the following...? TREC FHA Federal Reserve U.S. Treasury

Title 1

Home improvement loans are covered under what HUD title loan program..? Title 1 Title 3 Title 4 Title 5

Must have served at least 90 consecutive days during wartime

In order to be eligible for a VA loan, the borrower must satisfy which of the following conditions...? Must make a down payment of at least 20% of the sales price Must have a credit score of at least 720 Must have served at least 90 consecutive days during wartime All of the above

Section 251

Insurance for adjustable rate mortgages are covered under what HUD program...? Section 203b Section 211 Section 251 Section 223e

4 times

Lenders will generally loan up to ........a Veteran's available entitlement without a down payment? 2 times 3 times 4 times 5 times

The lender

Mortgage insurance premium primarily benefits which of the following...? The lender The borrower The seller All of the above

HUD

The FHA is under the supervision of...? TREC HUD Federal Reserve U.S. Treasury

One to four family homes

The HUD section 203 insures FHA loans for which of the following...? One to four family homes Multi-family buildings Commercial buildings Condominiums

T (True)

The HUD section 203k program is NOT available for real estate investors...? T (True) F (False)

Assumption of mortgage

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 Granting of mortgage Underwriting of mortgage Transfer of mortgage

1.75 percent (%)

The upfront fee for MIP is what percent of the loan amount...? 1 percent (%) 1.75 percent (%) 3 percent (%) 3.5 percent (%)

Guaranteed

VA loans are .............should the borrower default on their payments? Transferred Sold Guaranteed Subsidized

Servicemen's Readjustment Act

VA loans were created under the...? National Housing Act of 1934 Community Reinvestment Act Equal Credit Opportunity Act Servicemen's Readjustment Act

43 percent (%)

What is the maximum back-end debt ratio for an FHA insured loan...? 25 percent (%) 30 percent (%) 43 percent (%) 50 percent (%)

31 percent (%)

What is the maximum front-end debt ratio for an FHA insured loan...? 25 percent (%) 30 percent (%) 31 percent (%) 50 percent (%)

1 percentage point

What is the maximum interest rate change in any one year of a VA adjustable rate mortgage...? 1 percentage point 2 percentage points 7 percentage points 5 percentage points

5 percentage points

What is the maximum interest rate change over the life of a VA adjustable rate mortgage...? 2 percentage points 7 percentage points 10 percentage points 5 percentage points

There is no minimum down payment required

What is the minimum down payment required on a VA loan...? 3.5 percent of the purchase price 5 percent of the purchase price 20 percent of the purchase price There is no minimum down payment required

All of the above

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 All of the above

Certificate of Eligibility

What must be obtained in order to qualify for a VA loan...? Direct Endorsement Certificate Certificate of Eligibility Good Standing Credit Certificate VA Entitlement Certificate

Uniform Residential Loan Application

When a borrower applies for a loan, they typically fill out which of the following...? Debt Disclosure Form Loan Estimate Application Uniform Residential Loan Application All of the above

Certificate of Reasonable Value

When applying for a VA loan, the maximum value of the property is established by which of the following...? Certificate of Reasonable Value Certificate of Eligibility VA Entitlement Certificate Direct Endorsement Certificate

MIP

Which of the following is added to PITI...? Repairs and maintenance MIP Title insurance All of the above

Certificate of Reasonable Value

Which of the following is used as an appraisal for a VA loan...? Certificate of Eligibility VA Entitlement Certificate Certificate of Reasonable Value Direct Endorsement Certificate

Any outstanding judgments

Which of the following must be resolved by the borrower before an underwriter can process a loan...? Any outstanding judgments Any utility easements on the property Any existing mortgage liens from the seller All of the above

No party is allowed to work directly with the underwriter

Which of the following parties is allowed to work with a lender's underwriter in an effort to get the borrower approved...? The mortgage broker The appraiser The seller No party is allowed to work directly with the underwriter

All of the above

Which of the following properties may be purchased using a VA loan...? Single family homes Condominiums Cooperatives All of the above

Federal Housing Administration

Which of the following was created under the National Housing Act of 1934...? Department of Housing and Urban Development Fannie Mae Federal Housing Administration Freddie Mac

2

A duplex house includes how many dwelling units...? 1 2 3 4

Section 203k

An FHA loan used for the purchase and rehabilitation of an owner-occupied house may be insured by which HUD program...? Section 203k Section 211 Section 223e Section 551

1989

Loans that were originated prior to ........are generally assumable? 1991 1989 2009 2001

203b

Mortgage insurance for one to four family homes is covered by which HUD section...? 203b 223e 255 811

G.I. Bill

The Servicemen's Readjustment Act is also known as the...? G.I. Bill V.A. Bill FHA Bill Service Bill

Appraisal

When applying for a VA loan, the Certificate of Reasonable Value essentially serves as the...? Certificate of Eligibility Appraisal VA Entitlement Certificate Down payment