Chap 13

Question 1

The two ratios used to determine whether a loan will be approved is

Answer 1

A housing expense ratio
Total obligations ratio

Question 2

The process of risk evaluation is called

Answer 2

Mortgage Underwriting

Question 3

An applicant is evaluated using these 3 steps to qualify for a loan

Answer 3

Credit history
Income
Other Assets
Income Ratio

Question 5

What is it called when the percentage of the borrower monthly gross income which is required to make the monthly loan amount which is one twelve of the annual P.I.T.I

Answer 5

Housing Expense Ratio

Question 6

What is the percentage of the borrowers monthly gross
income that is required to make the monthly loan payment

Answer 6

Total Obligations Ratio

Question 7

The 3 types of mortgages are

Answer 7

FHA
VA
Conventional

Question 8

FHA requires a borrowers credit score to be atleast

Answer 8

580

Question 9

A down payment of how much is required for a FHA

Answer 9

3.5%

Question 10

To qualify for a FHA loan a borrower must nit exceed a housing expense ratio of what percentage

Answer 10

31

Question 11

A total obligation ratio of what percentage is required for a FHA loan

Answer 11

43%

Question 12

M.I.P means

Answer 12

Mortgage insurance premium

Question 13

H.U.D means

Answer 13

Housing and Urban Development

Question 14

FHA means

Answer 14

Federal Housing Administration

Question 15

When a lender forgives a debt, and allows a borrower to avoid foreclosure by entering a agreement with lender to sell property for less, this is called a

Answer 15

Short Sale

Question 20

Benefits of a short sale

Answer 20

..Homeowner avoids foreclosure
…Being released from all or most debts
…Less credit impact , compared to a actual foreclosure

Question 22

The standard loan to value ratio for a F.H.A LOAN IS

Answer 22

96.5

Question 23

How many years does a FHA has for their maximum term

Answer 23

30 years

Question 24

What is done to approve certain safety, security, & soundness / standards

Answer 24

Appraisal

Question 25

When a fha loan is assumed this means

Answer 25

Subject to rate change

Question 26

What type of units is not eligible for the F H.A Rehabilitation mortgage insurance program

Answer 26

Co-operative units

Question 27

A veteran must pay this fee which is similar to a origination fee

Answer 27

Funding fee

Question 28

Amount available for use on a loan is called

Answer 28

Entitlement

Question 29

To qualify for a Va Loan a borrower must not exceed a total obligations ratio of

Answer 29

41%

Question 30

A Va loan guarantees how much of losses with a foreclosure

Answer 30

25%

Question 31

What type of mortgage is not insured or guaranteed

Answer 31

Conventional

Question 32

A PMI is required when the loan amount exceeds how much %

Answer 32

80

Question 33

The current eligibility period of days during a military conflict for a veteran to get approved is

Answer 33

90 days

Question 34

This loan repayment method provides for payments of interest only during the term of the mortgage

Answer 34

Term Mortgage

Question 35

Term mortgage is also called

Answer 35

Straight Term Mortgage