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SAFE MLO Exam > Loan Products > Flashcards

Loan Products Flashcards

1
Q

FHA requires __ months of ownership before reselling.

A

3 months

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2
Q

FHA borrowers must have a valid ________.

A

Social Security Number

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3
Q

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.

A

1.75%

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4
Q

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

A

3.5% / 580 or above

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5
Q

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.

A

6%

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6
Q

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

A

31% / 43%

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7
Q

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

A

10%

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8
Q

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

A

4%

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9
Q

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

A

Department of Housing and Urban Development (HUD)

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10
Q

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

A

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

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11
Q

The FHA provides __% insurance to its approved lenders.

A

100%

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12
Q

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 ______.

A

60 days / 1 year

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13
Q

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

A

guarantees

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14
Q

VA loans are ___________ which means they require no _____________.

A

100% financed / down payment

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15
Q

VA loans require no _________________.

A

monthly insurance premium

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16
Q

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

A

41%

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17
Q

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

A

funding fee

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18
Q

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

A

Certificate of Eligibility (COE)

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19
Q

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.

A

DD-214

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20
Q

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

A

NGB 22/23

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21
Q

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

A

General Orders

22
Q

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

A

combine

23
Q

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

A

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

24
Q

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

A

assumable

25
Q

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

A

4%

26
Q

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

A

1%

27
Q

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

A

4% / 4%

28
Q

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

A

2.3%

29
Q

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

A

lender

30
Q

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

A

30 years / 4%

31
Q

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.

A

25%

32
Q

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

A

1%

33
Q

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.

A

eligible veteran

34
Q

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.

A

25% / $127,600

35
Q

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

A

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

36
Q

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

A

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

37
Q

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

A

farm / rural development

38
Q

USDA home loans are also known as ___________ loans.

A

Section 502

39
Q

USDA loans are funded by the _________________.

A

Department of Agriculture

40
Q

There is no ____________ on USDA loans.

A

prepay penalty

41
Q

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

A

premium/funding fee

42
Q

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

A

115%

43
Q

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

A

29% / 41%

44
Q

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

A

4%

45
Q

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

A

insured / guaranteed

46
Q

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

A

28% / 36%

47
Q

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

A

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

48
Q

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

A

5%

49
Q

Seller Concessions

Conventional Loan: ___
FHA Loan: ___
VA Loan: ___

A

3% / 6% / 4%

50
Q

Prepayment penalties are prohibited on _________.

A

FHA Loans

51
Q

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

A

30-year fixed rate

52
Q

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

A

Traditional Mortgage

SAFE MLO Exam (11 decks)

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