General Mortgage Knowledge Flashcards
The acronym PFC stands for?
Prepaid Finance charge
The cost of funds index is traditionally used to determine interest rates on what type of loans?
Rate adjustments on adjustable rate programs
A(n) ___ is a loan with an interest rate that can adjust monthly and that offers a borrower a number of payment choices such as : 30 year fix and P&I/Interest - only/ 1% of the loan resulting in negative amortization
Option arm
Which of the following terms is defined as a loan that exceeds Fannie Mac and Freddie Mac’s maximum Loan limit
A non conforming loan
Which of the following terms is defined as the method in which a lien is removed from property following full payment of a loan on the property.
Re conveyance
MIP would be used for which of the following?
An FHA loan
5/25 an 7/23 are used to designate loans that include which of the following?
A balloon payment
Which of the following loan program does not require credit or income documentation and does not require repayment
Reverse mortgage
A borrower is a 65 year old retiree with significant equity in his home. Which of the following would be the best option to assist him with paying for repairs on his home?
HECM
Which of the following would address the principal and interest payments due on a loan?
The amortization schedule
What is Fannie Mae’s Purpose in the secondary market?
To approve loans
Which of the following is true of VA loans?
They are assumable
The federal housing administration does what?
Guarantees loans
USDA loans are primarily for properties located in:
Rural areas
increasing loan balance resulting from the application of periodic payment creates which of the following for borrowers?
Negative amortization
VA loans require which of the following?
Funding fee
Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?
Conventional
According to the guidance on Non traditional mortgage product risks, which of the following risks would be important with regard to non traditional Arms?
The possibility of payment shock when amortizing payments begin
Non traditional arms are considered the riskiest of loans when they include any of the following except?
A refinance provision
A bi-weekly mortgage is a strategy some borrowers use to achieve interest saving, however there can be draw backs. Which of the following is not considered a draw back to a bi-weekly mortgage?
The borrower ends up making an extra mortgage payment per year.
All of the following can limit the adjustment on an Arm except?
Rate of yield cap
