Chapter 7 Quiz Flashcards
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%
D. 0%
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
D. Pre-paid loan interest
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. Borrower
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. 80% LTV
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
D. Determined by congress
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
D. Is paid upfront and then monthly
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
D. When the loan amount is reduced to 78% LTV
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
D. U.S. citizenship is required
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
C. Determined by the lender
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. Rise in insurance premiums
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. Borrower has sufficient credit
Which of the following applies to a VA-guaranteed loan?
A. Funding fee
B. MIP
C. PMI
D. Front-and back-end ratios
A. Funding fee
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. Loan-to-value
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
B. Reinstatement of full VA benefits
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
C. Regulation Z
