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AZ Real Estate > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

The required down payment by the VA on a non-graduated payment guaranteed loan is ______________ % of the loan amount.

A. 3.8%
B. 1.25 %
C. 3.5%
D. 0%

A

D. 0%

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2
Q

FHA monthly loan payments include all of the following EXCEPT

A. Loan principal
B. Pre-paid property taxes
C. Pre-paid property insurance
D. Pre-paid loan interest

A

D. Pre-paid loan interest

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3
Q

The mortgage insurance premium required for an FHA-insured loan would LEAST LIKELY benefit which of the following?

A. Borrower
B. Lender
C. FHA
D. HUD

A

A. Borrower

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4
Q

Which of the following conventional loan to value ratios would NOT need private mortgage insurance?

A. 80% LTV
B. 85% LTV
C. 90% LTV
D. 95% LTV

A

A. 80% LTV

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5
Q

The total amount of the VA-guaranteed loan entitlement is

A. The amount of the loan
B. 10% of the loan
C. 100% of the loan
D. Determined by congress

A

D. Determined by congress

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6
Q

When a new FHA loan is acquired, the mortgage insurance premium

A. Is paid by the lender
B. Is a quarterly payment
C. Cannot be added to the loan
D. Is paid upfront and then monthly

A

D. Is paid upfront and then monthly

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7
Q

PMI will automatically be eliminated from a conventional loan under what circumstances?

A. After 5 years of payments
B. Upon borrower becoming disabled
C. When the loan is sold to Fannie Mae
D. When the loan amount is reduced to 78% LTV

A

D. When the loan amount is reduced to 78% LTV

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8
Q

Which statement about FHA-insured loans is FALSE?

A. They require a larger down payment than VA-guaranteed loans
B. Prepayment penalties are prohibited
C. The lender origination fee cannot exceed one point
D. U.S. citizenship is required

A

A. They require a larger down payment than VA-guaranteed loans

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9
Q

The maximum VA loan limit is

A. Set by VA
B. Is 4 times the guaranty
C. Determined by the lender
D. 60% of eligibility

A

C. Determined by the lender

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10
Q

Monthly payments on an FHA loan would most likely increase due to a

A. Rise in insurance premiums
B. Rise in the interest rate
C. Shortening of the length of the loan
D. Change in loan amount

A

A. Rise in insurance premiums

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11
Q

When a lender reviews a FICO score for a borrower it tells the lender if the

A. Borrower has sufficient credit
B. Loan will be a mortgage or a deed of trust
C. Adjustable rate loan will have a cap
D. Loan will have a prepayment penalty

A

A. Borrower has sufficient credit

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12
Q

Which of the following applies to a VA-guaranteed loan?

A. Funding fee
B. MIP
C. PMI
D. Front-and back-end ratios

A

A. Funding fee

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13
Q

The VA funding fee would change based on the

A. Loan-to-value
B. Length of service
C. Amount of loan insurance
D. Military rank

A

A. Loan-to-value

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14
Q

When a veteran pays off a VA loan in full, the veteran is entitled to

A. Partial reinstatement
B. Reinstatement of full VA benefits
C. Return of MIP paid
D. Return of PMI paid

A

B. Reinstatement of full VA benefits

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15
Q

Which of the following requires lenders to inform borrowers, when buying a home secured by a mortgage or trust deed, of all finance charges, fees, and interest at the time of signing the loan documents?

A. HUD
B. FHA
C. Regulation Z
D. RESPA

A

C. Regulation Z

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16
Q

How many days would a lender have to give the buyer a Loan Estimate disclosure in a residential loan transaction?

A. 3 business days from purchase contract
B. 3 business days from close of escrow
C. 3 business days from loan application
D. 3 business days from approval

A

C. 3 business days from loan application

17
Q

The Real Estate Settlement Procedures Act applies to all of the following transactions EXCEPT

A. FHA-insured loans
B. VA-guaranteed loans
C. Conforming loans sold to Fannie Mae
D. Commercial loans

A

D. Commercial loans

18
Q

The booklet “Your Home Loan Toolkit” is a requirement of

A. The Federal Reserve
B. Regulation Z
C. RESPA
D. The Fair Housing Act

A

C. RESPA

19
Q

Which of the following is NOT a feature of an FHA loan?

A. Assumable
B. Or more clause
C. Budget loan
D. Alienation clause

A

D. Alienation clause

20
Q

Which statement about FHA-insured loans is FALSE?

A. They require a larger down payment that VA-guaranteed loans
B. Prepayment penalties are prohibited
C. The lender origination fee cannot exceed one point
D. US citizenship is required

A

D. US citizenship is required

21
Q

The main appeal of FHA loans to the borrower lies in

A. low interest rates
B. minimum down payment
C. unlimited mortgage ceiling
D. easy accessibility

A

B. minimum down payment

22
Q

The VA funding fee would change based on the

A. Value of the home
B. Details of service
C. Amount of loan insurance
D. Military rank

A

B. Details of service

AZ Real Estate (20 decks)

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