general mortgage knowledge

Question 1

An FHA mortgage is

Answer 1

100% insured

Question 2

FHA maximum loan amounts do not include

Answer 2

up front mortgage insurance premium

Question 3

A VA mortgage has all the following features EXCEPT:

Answer 3

It has a mortgage insurance premium

Question 4

A VA appraisal is known as a:

Answer 4

Certificate of reasonable value

Question 5

A USDA loan has

Answer 5

100% financing

Question 6

A conventional mortgage does NOT have a

Answer 6

Borrower income limit

Question 7

Interest rates are set by:

Answer 7

Lenders

Question 8

A reverse mortgage is an example of:

Answer 8

Negative amortization

Question 9

In an adjustable rate mortgage:

Answer 9

Index + margin = fully indexed rate

Question 10

Which of the following is expressed as basis points in an adjustable rate mortgage:

Answer 10

Margin

Question 11

A 2/3/7 ARM has a lifetime cap of

Answer 11

7%

Question 12

If a 15 year ARM has a starting interest rate of 5% and has an adjustment rate cap of 2% and a lifetime cap of 8%, what is the maximum interest rate that can be charged for the first adjustment period ?

Answer 12

7%

Question 13

A term mortgage is NOT

Answer 13

Fully amortized

Question 14

A graduate payment mortgage

Answer 14

has payments that start low and increase over time

Question 15

Borrowers equity equals

Answer 15

Appraised value - loan balance

Question 16

Escrow impounds are collected by the

Answer 16

Lender

Question 17

Private mortgage insurance is required for

Answer 17

Conventional loans where there is less than a 20% down payment

Question 18

what type of mortgage has a fixed interest rate and increasing payments:

Answer 18

growing equity mortgage

Question 19

The FHA is an agency within

Answer 19

Department of HUD

Question 20

PITI stands for

Answer 20

Principle,Interest,taxes,insurance

Question 21

Which is a common index used in ARMS

Answer 21

The London inter-bank offered rate

Question 22

a bi-weekly mortgage is paid

Answer 22

every 2 weeks

Question 23

which has the superior lien position?

Answer 23

Senior mortgage

Question 24

80 basis points equals what percentage of the loan amount?

Answer 24

.8%

Question 25

Which lien will most likely have the lowest lien position:

Answer 25

IRS tax lien

Question 26

A gift letter does NOT include the :

Answer 26

terms of repayment

Question 27

a partially amortized loan which consists of a lump sum payoff at the end of a term is:

Answer 27

Balloon mortgage

Question 28

a mortgage with payments due every two weeks is a

Answer 28

Bi-weekly mortgage

Question 29

A VA appraisal is known as a

Answer 29

certificate of reasonable value

Question 30

the fluctuating economic indicator used in an ARM is the

Answer 30

index

Question 31

a loan in which interest is subsidized (helped paid for) for a stated period of time is a

Answer 31

Buy-down mortgage

Question 32

Which of the following CANNOT contribute money towards the borrowers down payment

Answer 32

real estate agent

Question 33

the maximum FHA seller concession is

Answer 33

6%

Question 34

the maximum VA seller concession is

Answer 34

4% + standard closing costs

Question 35

what is the minimum down payment usually required for non-owner occupied rental properties:

Answer 35

20%

Question 36

Borrowers must be notified of an ARM rate change how may months before the initial reset:

Answer 36

6

Question 37

How do you convert basis points to a percentage?

Answer 37

divide it by 100