Chapter 10: The Residential Lending Process Flashcards
Which of the following loans are generally assumable, under specified conditions, by any buyer?
-FHA loans
-VA loans
VA and FHA loans are assumable by any purchaser who passes a credit check. Cal-Vet loans can only be assumed by another eligible California veteran.
The Truth in Lending Act is implemented by
Regulation Z.
The Federal Reserve Board’s Regulation Z implements the Truth in Lending Act.
When the interest rate charged to the borrower is adjusted at specified intervals, the payment
will increase or decrease along with the interest rate.
The payment in an adjustable rate mortgage (ARM) will increase or decrease at the specified intervals to accommodate the increase or decrease in interest rate.
A conforming loan is a:
loan that meets the standard requirements to be offered for sale on the secondary market.
A conforming loan meets the standard requirements of the secondary market.
The California state-sponsored residential finance program for veterans is called the:
California Veterans Farm and Home Purchase Program.
California has instituted a program for offering attractive loans to purchase farms or a single-family dwelling to its veterans. This program is called the California Veterans Farm and Home Purchase Program, and commonly referred to as Cal-Vet loans.
A mortgage broker:
brings lenders and borrowers together.
A mortgage broker brings buyers and lenders together. A mortgage banker originates and services real estate loans.
APR refers to
the annual percentage rate after all finance charges have been applied.
APR is the annual percentage rate after finance charges have been applied, thus raising the actual annual interest rate charged.
_________ is the payment of discount points to reduce the interest rate on a buyer’s loan.
A buydown
Buydown is the payment of discount points to buy down or reduce the interest rate charged to the buyer.
A REIT is:
an unincorporated association of real estate investors.
A REIT is an unincorporated trust of at least 100 real estate investors.
The Department of Veterans Affairs will issue a __________ based on the results of an appraisal by a VA appraiser.
Certificate of Reasonable Value (CRV)
The Department of Veterans Affairs issues a Certificate of Reasonable Value following an approved appraisal, which sets forth the current market value based upon the appraisal.
