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NMLS Training > General Mortgage Knowledge > Flashcards

General Mortgage Knowledge Flashcards

1
Q

The acronym PFC stands for?

A

Prepaid Finance charge

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2
Q

The cost of funds index is traditionally used to determine interest rates on what type of loans?

A

Rate adjustments on adjustable rate programs

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3
Q

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

A

Option arm

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4
Q

Which of the following terms is defined as a loan that exceeds Fannie Mac and Freddie Mac’s maximum Loan limit

A

A non conforming loan

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5
Q

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.

A

Re conveyance

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6
Q

MIP would be used for which of the following?

A

An FHA loan

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7
Q

5/25 an 7/23 are used to designate loans that include which of the following?

A

A balloon payment

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8
Q

Which of the following loan program does not require credit or income documentation and does not require repayment

A

Reverse mortgage

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9
Q

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?

A

HECM

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10
Q

Which of the following would address the principal and interest payments due on a loan?

A

The amortization schedule

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11
Q

What is Fannie Mae’s Purpose in the secondary market?

A

To approve loans

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12
Q

Which of the following is true of VA loans?

A

They are assumable

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13
Q

The federal housing administration does what?

A

Guarantees loans

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14
Q

USDA loans are primarily for properties located in:

A

Rural areas

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15
Q

increasing loan balance resulting from the application of periodic payment creates which of the following for borrowers?

A

Negative amortization

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16
Q

VA loans require which of the following?

A

Funding fee

17
Q

Which of the following terms specifically refers to a loan that is not obtained through a program of the federal government?

A

Conventional

18
Q

According to the guidance on Non traditional mortgage product risks, which of the following risks would be important with regard to non traditional Arms?

A

The possibility of payment shock when amortizing payments begin

19
Q

Non traditional arms are considered the riskiest of loans when they include any of the following except?

A

A refinance provision

20
Q

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?

A

The borrower ends up making an extra mortgage payment per year.

21
Q

All of the following can limit the adjustment on an Arm except?

A

Rate of yield cap

NMLS Training (12 decks)

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