Non traditional mortgages overview
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