REF - Chapter 8
What time period must borrowers have in job history with the same employer to qualify?
2 years
The seller can pay all of the veterans closing costs up to _______% of the sales price of the home.
4%
EXERCISE 1 Sales Price: $230,000 LTV: 95% Calculate both upfront and monthly MIP (Mortgage Insurance Premium).
Step 1 Calculate the upfront MIP. Mortgage insurance is calculated on the loan amount. Sales Price X Loan-to-Value = Loan Amount $230,000 times 95% = $218,500 Loan Amount × 1.75% = Upfront MIP Fee. $218,500 × 1.75% = $3,823.75 Round down to nearest $50 and charge buyer the remainder at closing. $3,800 added to the mortgage and $23.75 charged to the buyer at closing. Step 2 Calculate the monthly MIP. This is calculated on the loan amount. Loan Amount × .0055 ÷12 = Monthly MIP $218,500 × .0055 ÷ 12 = $100.15 rounded. This is added to the monthly mortgage payment.
EXERCISE 2 Sales Price: $190,000 LTV: 90% Calculate both upfront and monthly MIP.
Step 1: Calculate the loan amount. $190,000 × 90% = $171,000 Calculate the upfront fee. $171,000 X 1.75% = $2,992.50 Round down to nearest $50. $2,950 added to the mortgage amount and $42.50 charged to the buyer at closing. Step 2: Calculate the monthly MIP. $171,000 × .0055 ÷ 12 = $78.38 rounded. This will be added to the monthly mortgage payment.
If the homeowner's insurance premium or this house is $1250 annually, what is the lender going to require to be escrowed in reserves?
$1250 ÷ 12 = $104.17/month × 14 months = $1458.33
What if the active duty veteran decided to put 10% down on the property? What would the VA funding fee be?
$275,000 × 90% = $247,500 × 1.5% = $3712.50
How much would the origination fee be if the veteran were buying a $275,000 home and was putting 5% down payment?
$275,000 × 95% = $261,250 × 1% = $2612.50
The annual taxes are estimated to be $4250 on this home. What amount is the lender going to require to be escrowed for taxes as part of the prepaid closing costs?
$4250 ÷ 12 = $354.17/ month × 3 months = $1062.50
Which of the following is NOT allowed under FHA loans? A. Vacation home B. Condominium C. Manufactured home D. Buy land and build a home
A. Vacation home
Name three fees that the VA buyer cannot pay and these fees must be paid by the seller.
Attorneys' fees Document prep fees Escrow fee Underwriting fees Processing fees Releases
If the borrower has a previous foreclosure, can he use FHA to purchase a new home? A. No B. Yes, anytime C. Yes, after a 3 year wait with clean credit D. Yes, after a 1 year wait with clean credit
C. Yes, after a 3 year wait with clean credit
What are the two ratios used for FHA loans? A. 28%/36% B. There are no qualifying ratios. C. 25%/50% D. 29%/41%
D. 29%/41%
VA loans are insured by the federal government. A. True B. False
False.
All the following are important features of VA loans EXCEPT: A. Graduated payments throughout the life of the loan B. No down payment C. Limits on closing cost D. Can repay the loan without penalty
Graduated payments throughout the life of the loan
VA loans are ___________________ loans. A. Non-qualifying B. Guaranteed C. Insured D. PMI required
Guaranteed
Can a purchaser use an FHA loan to purchase investment property? A. Yes B. No
No
What is the amount of the VA funding fee if an active duty veteran is obtaining VA financing on the sales price of $275,000? The veteran is putting 5% down on the property.
Sales price $275,000 × 95% = $261,250 loan × 1.50% (VA funding fee for 5% down payment) = $3918.75
EXERCISE 3 Sales Price: $275,000 LTV: 97.5% Calculate both upfront and monthly MIP.
Step 1: Calculate the loan amount. $275,000 × 97.5% = $268,125 Calculate the upfront fee. $268,125 × 1.75% = $4,692.19 Round down to nearest $50. $4,650 added to the mortgage amount and $42.19 charged to the buyer at closing. Step 2: Calculate the monthly MIP. $268,125 × .0055 ÷ 12 = $122.89 rounded. This will be added to the monthly mortgage payment.
FHA is part of the Department of Housing and Urban Development. A. True B. False
True
FHA loans are insured. VA loans are guaranteed.
True