Section 6 Unit 1

Question 1

The Loan Inquiry Process

Answer 1

A licensed MLO will explain the basic loan terms such as LTV, interest rates and Debt to income ratio

NOTE: If you quote a rate, be sure to provide the annual percentage rate (APR) as well

Today’s interest rate is 3.5% an APR is 4.13% for a 30 years fixed rate loan.

Question 2

Regulation Z Truth in Lending (TILA)

Question 3

3 Categories of Tolerance

Answer 3

1. Zero tolerance
2. 10% cumulative tolerance
3. No or unlimited tolerance

Question 4

Zero Tolerance

Answer 4

Fees paid to lenders (origination charges)
Fees paid to credit unions, mortgage broker or an affiliate of either.
Any fees paid to any party if the member was not permitted to shop
Transfer Taxes
Rate lock fees

Question 5

10% Tolerance

Answer 5

Recording Fees
Fees paid to unaffiliated third party when member is permitted to shop. i.e settlement agent fees, notary fees

Question 6

No or Unlimited Tolerance

Answer 6

Prepaid interest
Property tax
Property Insurance Premiums
Lender’s title insurance
Homeowner’s insurance fees
Condominium fees
Cooperative fees
Amounts place into an escrow or similar account