Loan Products

Question 1

FHA requires __ months of ownership before reselling.

Answer 1

3 months

Question 2

FHA borrowers must have a valid ________.

Answer 2

Social Security Number

Question 3

In an FHA loan — the upfront mortgage insurance premium (UFMIP) for a 15-year and 30-year purchase and refinance transactions are ___% of the loan amount.

Answer 3

1.75%

Question 4

FHA loans have a minimum down payment of ____ with a credit score of _______. (The down payment can be a gift from a relative.)

Answer 4

3.5% / 580 or above

Question 5

In a FHA loan, Sellers may contribute up to __% of the lesser of the property’s sales price or the appraised value toward closing costs.

Answer 5

6%

Question 6

In order to be approved for an FHA loan, borrowers must have a front end ratio of __% and a back end ration of __%.

Answer 6

31% / 43%

Question 7

On a FHA Loan, if credit score is between 500-579, the minimum down payment is __%.

Answer 7

10%

Question 8

FHA loans have a __% late fee of the P and I only.

Answer 8

4%

Question 9

The Federal Housing Administration (FHA) is a government agency within the ________________.

Answer 9

Department of Housing and Urban Development (HUD)

Question 10

FHA loans have a required ________________ and a ________________ regardless of the down payment amount.

Answer 10

Up Front Mortgage Insurance Premium (UFMIP) / Monthly Insurance Premium (MIP)

Question 11

The FHA provides __% insurance to its approved lenders.

Answer 11

100%

Question 12

Borrowers with FHA loans must establish occupancy of the property as their principal residence within ______ of signing a security instrument and live in the house for at least ______.

Answer 12

60 days / 1 year

Question 13

The Department of Veteran’s Affairs (DVA) partially ___________ VA loans.

Answer 13

guarantees

Question 14

VA loans are ___________ which means they require no _____________.

Answer 14

100% financed / down payment

Question 15

VA loans require no _________________.

Answer 15

monthly insurance premium

Question 16

VA loans look for a DTI that does not exceed ____.

Answer 16

41%

Question 17

VA loans do require a one time non-refundable variable ____________ at closing. This is waived for disabled veterans and surviving spouses.

Answer 17

funding fee

Question 18

VA loans require a veteran to produce a _________________, which shows the amount of his entitlement.

Answer 18

Certificate of Eligibility (COE)

Question 19

On a VA Loan a __________ (commonly called Discharge Papers or Report of Separation) is issued by the Department of Defense – is required if the Veteran has been discharged.

Answer 19

DD-214

Question 20

On a VA Loan a _________ for Army or Air National Guard reservist with six or more years of reserve service – required if currently “active”.

Answer 20

NGB 22/23

Question 21

On a VA Loan, ______________ are required for members of the military currently on active duty with qualifying services remaining.

Answer 21

General Orders

Question 22

Two eligible veterans may ________ their VA Benefits to qualify for a larger loan.

Answer 22

combine

Question 23

A VA appraisal is known as a __________________. It can also be called a __________________.

Answer 23

Certificate of Reasonable Value (CRV) / Notice of Value (NOV)

Question 24

A VA loan is ___________; it does not have a due-on-sale clause.

Answer 24

assumable

Question 25

VA loans have a ___ late fee (of the P&I only).

Answer 25

4%

Question 26

For VA loans, the lender may also charge a flat fee, up to ___ of the loan amount, to cover the lender’s costs.

Answer 26

1%

Question 27

Seller concessions exceeding ___ of the established reasonable value of the property are unacceptable. Max seller concession on a VA loan is ___.

Answer 27

4% / 4%

Question 28

The typical funding fee for a VA loan is ____ of the purchase price of the home.

Answer 28

2.3%

Question 29

The _______ sets the interest rate on VA loans, not the VA.

Answer 29

lender

Question 30

The maximum term for a VA loan is _______, and the late fee is ____ of the monthly P&I.

Answer 30

30 years / 4%

Question 31

The VA doesn’t limit the price a veteran can pay for a house – but it does limit the amount it will guarantee to ____ of the purchased price or value - whichever is less.

Answer 31

25%

Question 32

Lender may also charge a flat fee, up to ___ of the loan amount, to cover the lender’s costs.

Answer 32

1%

Question 33

If legally married, spouse’s income may also be considered for qualification purposes: Non-married co-borrower is not allowed on a VA loan unless he or she is an ___________ who will occupy the home.

Answer 33

eligible veteran

Question 34

An entitlement is the maximum amount that the VA will “guarantee” on behalf of a Veteran. Veterans Entitlement is based on ___ of the County Limit, up to a maximum of _________. If an entitlement is insufficient, a cash down payment may allowed for the balance.

Answer 34

25% / $127,600

Question 35

USDA loans are partially ___________ by the US government, allow for ____ financing, have a one-time ___________ that is paid at closing, and have no required _______________.

Answer 35

partially guaranteed / 100% / funding fee / monthly mortgage insurance

Question 36

The USDA loans are __________, __________, ________, ____________ loans.

Answer 36

lower-income / owner-occupied / 30 year / fixed-rate

Question 37

USDA home loans are also known as _____ loans or _______________ loans.

Answer 37

farm / rural development

Question 38

USDA home loans are also known as ___________ loans.

Answer 38

Section 502

Question 39

USDA loans are funded by the _________________.

Answer 39

Department of Agriculture

Question 40

There is no ____________ on USDA loans.

Answer 40

prepay penalty

Question 41

USDA Mortgages do not have PMI, but instead have an upfront ______________ that is meant to cover any losses incurred by borrowers who may default.

Answer 41

premium/funding fee

Question 42

Guaranteed loan applicants may have an income of up to ____ of Area Medium Income (AMI).

Answer 42

115%

Question 43

Debt Ratios: USDA utilizes debt-to-income ratios of ___ for housing and ____ for total debt.

Answer 43

29% / 41%

Question 44

The late fee for a USDA loan is ___ of the monthly P and I.

Answer 44

4%

Question 45

Conventional loans are not _________ or _________ by any government authority (e.g. FHA, VA or USDA)

Answer 45

insured / guaranteed

Question 46

The qualifying ratios for a conventional loan are: Housing Expense Ratio - ___, Total Debt to Income Ratio - ___.

Answer 46

28% / 36%

Question 47

On a conventional loan, PMI is required when the borrower ____________________.

Answer 47

puts less than 20% down (LTV greater than 80%)

Question 48

Late fee for a conventional loan is ___ of the principal and interest.

Answer 48

5%

Question 49

Seller Concessions Conventional Loan: ___ FHA Loan: ___ VA Loan: ___

Answer 49

3% / 6% / 4%

Question 50

Prepayment penalties are prohibited on _________.

Answer 50

FHA Loans

Question 51

The SAFE Act defines a non-traditional mortgage product as anything other than a __________________ mortgage.

Answer 51

30-year fixed rate

Question 52

a 30-year fixed rate mortgage is also known as a _______________.

Answer 52

Traditional Mortgage