Insurance Flashcards

1
Q

What does homeowner/ hazard insurance do?

A

Protects lender and borrower

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2
Q

How much prepaid insurance does homebuyer need to close?

A

1 year pre paid insurance

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3
Q

How much insurance does a borrower need?

A

Enough to cover structure and attached garage

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4
Q

What does condo insurance cover?

A

Interior walls and personal property and liability if someone is injured

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5
Q

What is the mortgagee clause?

A

When lender is added to policy as loss payee

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6
Q

What happens if insurance lapses

A

Lender places forced insurance on home and must send 2 notices within 45 days with no response

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7
Q

What is PMI

A

Private mortgage insurance that protects lender in case of default by borrower

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8
Q

When is PMI required?

A

On conforming loans over 80% LTV

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9
Q

When does my PMI automatically drop off?

A

At 78% LTV

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10
Q

If the premium was .94 % on a $150,000 loan, what is the monthly cost of PMI?

A

117.50
**150k x .0094/12 = $117.50

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11
Q

How much does PMI allow a borrower to put down

A

5% down because the company is taking some of risk if borrower defaults

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12
Q

Some of the factors private mortgage insurance companies consider when they set their rates and coverage parameters include all of the following except:
a. Loan amount and loan type
b. LTV and borrowers credit score
c. Borrower’s age and familial status
d. Type of property

A

c.

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13
Q

What is title insurance?

A

Protects from financial loss due to defects on title to real property and from unforceability of liens

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14
Q

What are the 2 types of title insurance

A
  1. owners policy
  2. lender’s policy
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15
Q

What is owner’s policy

A

free and clear of all defects

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16
Q

What is lender’s policy

A

Follows loan if sold in secondary market

17
Q

What is ISAOA?

A

It’s successor and / or assigns , makes it portable on secondary market?

18
Q

What is ATIMA

A

As their interests may appear

19
Q

What is title search?

A

allows lender to determine if their are liens or judgements on a property

20
Q

What is NFIP

A

National flood insurance program - identifies flood plans and maps through fema who creates a firm

21
Q

What is FIRM

A

Flood insurance rate maps

22
Q

What does flood insurance do

A

Protects those who have a structure in a flood zone
-Very expensive

23
Q

Does every home loan require a flood certification?

A

Yes

24
Q

How do you know if house sits in a flood zone?

A

Appraisers advise lenders on appraisal form

25
Q

How do you know if you need flood insurance

A

If in flood a or v you are required

26
Q

What is coverage limit for flood insurance

A

250k

27
Q

What amount does Flood Insurance Cover?
a.) 80% of dwelling
b.) value of dwelling minus value of land
c.) value of dwelling plus land
d.) 100% of dwelling

A

d