A-7 Residential Financing

Question 1

Which FHA title loan program features for construction, buying a home or refinancing existing mortgages.

Answer 1

Title II

Question 2

Which FHA title program was created for the Federal National Mortgage Association “Fannie Mae” to purchase title II loans from primary lenders.

Answer 2

Title III

Question 3

In an FHA loan what percent must the buyer put down?

Answer 3

3.5%

Question 4

Who sets the maximum FHA loan amount?

Answer 4

Congress

Question 5

What loan program requires an escape clause that permits the buyer to void the contract if the property does not appraise for the sale price?

Answer 5

FHA

Question 6

An FHA appraisal is valid for how many days?

Answer 6

120 days

Question 7

What are the four C’s in acquiring an FHA loan

Answer 7

Cash, credit, collateral, and capacity

Question 8

At what credit score is a buyer approved for maximum financing in an FHA loan?

Answer 8

580

Question 9

In an FHA loan, borrowers with decision credit score between what two values are limited to 90% of LTV?

Answer 9

500–579

Question 10

What are the qualifying ratios for an FHA loan?

Answer 10

31% for the front ratio (house payments PITT, divided by gross monthly income)and 43% for the back ratio (long-term debt such as payments on cars, credit cards and furniture)

Question 11

In an FHA loan what percent is the seller allowed to contribute?

Answer 11

6% of the sales price, this includes not only discount points, but any closing costs, prepaid expenses and temporary buydown cost that the seller pays for the fire one point equals 1% of the loan amount

Question 12

What are be a qualifying ratios?

Answer 12

Can be as much as 41% of the buyers gross monthly income

Question 13

What is the VA guaranteed to the lender?

Answer 13

Typically lenders do not loan more than four times the VA eligibility, the VA will guarantee the Wender up to 104,250 on purchases of $417,000 or less.

Question 14

Are conventional fixed rate loans and variable rate mortgage is assumable?

Answer 14

Only variable rate mortgages are simple, all fixed conventional bones have a due on sale clause

Question 15

Variable rate mortgages, or adjustable rate mortgages have a – CAP?

Answer 15

2–6, which means the interest rate cannot be adjusted upward more than 2% a year or more than 6% over the life of the loan from the initial floor rate

Question 16

What is a home equity conversion loan?

Answer 16

A reverse mortgage in which homeowners can borrow money against the value of their home

Question 17

How old do you have to be to qualify for a reverse mortgage?

Answer 17

62

Question 18

Which FHA title program features relatively modest loans for home repairs and improvements

Answer 18

Title I