Lesson 9 Flashcards
Which of the following BEST describes a reduction certificate?
It shows the balance due on a mortgage.
A mortgage insurance premium (MIP) is associated with what type of loan?
FHA
A defeasance clause in a mortgage provides for:
The lien to be released by payment of the note
An advantage of FHA financing to a buyer is:
That the property must meet minimum property requirements.
A VA owner may do which?
Sell to a non-veteran who may assume the VA loan
What kind of loan provides that a borrower is restored his or her loan eligibility benefits when the loan is paid off?
VA Loan
Increasing the points asked for a loan in the absence of any economic change should have what effect on the loan?
Reduce the interest
What is the benefit of having FHA insurance?
It pays for any needed corrective measures not revealed by FHA appraisal
A conventional guaranteed mortgage is a mortgage that is:
Insured by a private mortgage insurance company
A lender is able to decide if a loan to be made is eligible for FHA insurance. This ability of the lender is known as
Direct endorsement.
Funds for Federal Housing Administration (FHA) loans are usually provided by:
Approved Lenders
None of the following is true about Fannie Mae EXCEPT:
It Purchases mortgages
All of the following are true about nonconventional loans EXCEPT:
FHA loans for nonowner occupants are assumable in the first 24 months without lender approval
A borrower obtains a home improvement loan secured by her house that is neither insured nor guaranteed by a government agency. She has obtained which type of loan?
Conventional
What type of mortgage may permit a builder to obtain the release of lots, one at a time, as they are developed?
Blanket mortgage
Under Regulation Z, the borrower, except in the case of a purchase money mortgage to buy or construct a home, has a right of rescission of:
Three business days.
Only one of the following is not included in the “finance charge” under Regulation Z:
Attorney’s fees
The provisions of the Truth in Lending Act (Regulation Z) require all of the following to be disclosed to a residential buyer EXCEPT:
The real estate brokerage commission
A home is purchased using a fixed-rate, fully amortized mortgage loan. Which statement regarding this mortgage is TRUE?
Each mortgage payment amount is the same
Which of the following is exempt from the right of rescission under the Truth-in-Lending Act?
A conventional first purchase-money mortgage on the borrower’s principal dwelling
The Truth-in-Lending Act prohibits which of the following?
Advertising only the percentage of down payment
The Federal Reserve System regulates the money supply in which of the following ways?
Buying securities, changing the discount rate, and controlling banking reserves
Which law requires that all advertising that references mortgage financing terms contain certain disclosures?
Truth in Lending Act (Regulation Z)
A Bridge Loan:
Is used to finance purchase of a new home until old home is sold
What is NOT required in the Truth-in-Lending disclosure statement?
Amount of interest per installment
A VA loan may be granted for the purchase of a one-family to four-family dwelling if the:
Veteran occupies one of the units
All of the following are requirements of the Real Estate Settlement Procedures Act EXCEPT that the lender:
Collect three months’ reserves for tax and insurance
Under a Department of Veterans Affairs loan, a veteran can:
Require a veteran buyer to agree in the sale contract to assume the loan and substitute his or her VA eligibility
Regulation Z provides a right of rescission
That expires three business days after the date of consummation of the transaction. or the date on which the lender makes material disclosures, whichever is later
The Federal Equal Credit Opportunity Act allows lenders to discriminate against potential borrowers on the basis of:
Amount of income
The Equal Credit Opportunity Act makes it illegal for lenders to refuse credit or discriminate because an applicant is:
A single woman
Which type of loan has its interest rate based on some type of index?
Adjustabe-rate Mortgage
The amount a lender will loan is generally based on the:
Appraised value for loan purposes or the sales price, whichever is lower
Lenders are required to give a bon fide estimate of settlement costs within 3 days of loan application under:
RESPA
RESPA forms must be used in all of the following loans EXCEPT:
Seller Financing
A conventional guaranteed mortgage is a mortgage that is:
Insured by a private mortgage insurance company
All of the following appear in a promissory note EXCEPT:
Purchase price of property
