Loans - overview

Question 1

What form is used to qualify borrowers applying for one-to-four-family property?

Answer 1

Uniform Residential Loan Application (URLA)

This form is commonly used in the mortgage industry for residential loan applications.

Question 2

How is qualifying the property accomplished?

Answer 2

With a property appraisal

A property appraisal determines the market value of the property to ensure it meets loan requirements.

Question 3

What is preapproval?

Answer 3

The applicant has gone through and verified credit (hard credit check)

Preapproval indicates a more thorough check of the applicant’s financial background.

Question 4

What is prequalification?

Answer 4

Just talking to the lender to find out what you qualify for (no credit check or soft credit check)

Prequalification is a preliminary step before formal application.

Question 5

What is a conventional loan?

Answer 5

It’s not insured or guaranteed by a government agency

Conventional loans are often preferred for their flexibility and terms.

Question 6

A conventional loan requires the lender to assume ____ of default.

Answer 6

the full risk

This means the lender is fully responsible for loss if the borrower defaults.

Question 7

What is a nonconventional loan?

Answer 7

Nonconventional loans are backed by the federal government and include FHA-insured and VA-guaranteed loans

These loans generally have different qualification criteria and protections.