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Real estate sales associate > Chapter 13 > Flashcards

Chapter 13 Flashcards

1
Q

What does a lender do to qualify a buyer for a loan?

A

Check Credit History
Check income

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2
Q

What is the Housing Expense Ratio (HER)?

A

Percentage of borrower’s gross monthly income that is used to pay the monthly loan payment.
How much of your income is going to go to the house expense

Monthly loan payment is 1/12 of the principal, the interest, taxes, and insurance

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3
Q

What is the PITI?

A

It is the items used to calculate a loan’s monthly payment:
Principal
Interest
Taxes
Insurance

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4
Q

How is the Housing expense ratio calculated?

A

PITI / Gross income x 100%

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5
Q

What is the Total Obligations Ratio (TOR)?

A

The percentage of your income that goes towards all your monthly expenses including the mortgage and escrow payments (credit cards, car loan, child support, etc)

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6
Q

How is the Total Obligations Ratio calculated?

A

Total obligations / Gross income * 100%

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7
Q

What does the Federal Housing Administration (FHA) do?

A

FHA insures loans. They do not make loans

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8
Q

When do you need to have a PMI in a conventional loan?

A

when your loan to value ratio is above 80%

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9
Q

What does the HUD do?

A

it limits the max amount of an FHA insured loan

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10
Q

What is the max housing expense ratio and total obligation ratio a borrower can have for an FHA loan?

A

housing expense cannot exceed 31%
total obligations cannot exceed 43%

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11
Q

Can a borrower prepay an FHA insured loan?

A

yes, without a penalty

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12
Q

What does the VA mortgage program do?

A

They guarantee loans

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13
Q

What are the requirements for a VA loan?

A

Must be for owner-occupied residences
Veteran must have a certificate of eligibility
Veteran must have served for a specified amount of time and be honorably discharged

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14
Q

Which is the most abrupt control device used by the Federal Reserve?

A

Changes in the reserve

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15
Q

What can the federal reserve do if a bank does not balance their deposit accounts daily?

A

impose severe fines, other disciplinary actions, or possible withdrawal of the bank’s federal charter

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16
Q

Which is the least effective tool of the Federal Reserve?

A

Changes in discount rate
It still generates the most publicity

17
Q

What is the primary mortgage market?

A

this is where loans are originated

18
Q

Does the secondary mortgage market deal with the public?

A

no, only primary mortgage market deals with the public

19
Q

Which lenders are only interested in giving large loans?

A

Life insurance companies

20
Q

Which are the types of private lenders?

A

Savings accounts
Commercial Banks
Life insurance

21
Q

What type of loans do commercial banks do?

A

only short term loans to assist commerce

22
Q

Which type of lender finances most apartment buildings and commercial properties?

A

Life insurance companies

23
Q

What do mortgage loan originators (MLOs) do?

A

They do not make loans
They arrange loans by shopping around for lenders with lowest interest rates and easiest borrower qualifications

24
Q

What is the purpose of the secondary mortgage market?

A

They provide liquidity to the primary market, so they don’t run out of funds

25
Q

Which are the main secondary mortgage market lenders?

A

FNMA - Fannie Mae
FHLMC - Freddie Mac
GNMA - Gennie Mae

26
Q

Lenders cannot discriminate against:

A

Race
Color
National Origin
Religion
Age
Sex
Marital Status

27
Q

what does RESPA do?

A

Requires lenders to provide an estimate of closing costs within 3 business days of the loan application being submitted

Requires lenders to provide a “Your home loan toolkit” booklet

Requires the lender to send a disclosure indicating whether they will be servicing the loan or transferring it to another lender

28
Q

What is the Truth-in-lending act?

A

Assures the consumers receive meaningful information concerning the true cost of credit

29
Q

What are the triggering terms?

A

CHOOSE THE ANSWER WITH NO NUMBERS IN IT

Real estate sales associate (18 decks)

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