CHAPTER FOUR: FHA INSURED LOANS

Question 1

____ insured loans- a mortgage loan in which payments are insured by the Federal Housing AUthority.

• it is a type of mortgage. It is not issued by the FHA- but is insured by the organization.
• for those who don’t qualify for conventional loans
• reduce risk of high lending

Answer 1

FHA insured loans

Question 2

FHA insured loans

• If the home owner defaults, the ____ helps with some of those losses.
• low interest rates
• lender facing less risk
• credit qualifications are reduced
• low down payment

Answer 2

government

Question 3

Convential loans need a credit score of ____

• also need LTV (loan to value) must be at 90% or less. (THat means the home loan must be at least 10% higher than the amount borrowed.

Answer 3

580

Question 4

FHA loans have an interest rate of

Answer 4

3.5%

Question 5

FHA loans - individuals must be a first time ___ ___. or haven’t maintained a loan in the last three years.

• If one spouse has a home under FHA loan and the other does not, they can get one.
• can qualify if they weren’t the primary buyer
• mobile home and RV owners are considered first time home buyers

Answer 5

home buyer

Question 6

____ ____ premiums- required for all FHA loans as long with a really good inspection. this is the amount paid by a mortgagor for mortgagee insurance on the FHA insured loan.

• 1.75% of the whole loan.
• paid upfront
• M

Answer 6

Mortgage INsurance Premium

Question 7

Conventional loans require ____ ____ insurance. FHA loans require ____ ____ premiums.

Answer 7

private mortgage insurance

mortgage insurance premium

Question 8

FHA loan borrowers must pay the mortgagee the lender mortgage insurance premium for the ___ of the loan.

Answer 8

life