Question 1

A loan that is repaid with periodic payments that include principal and interest so that the entire loan is paid by the end of the term is a(n):

Group of answer choices

unconventional loan.

straight note loan.

annualized loan.

amortized loan.

Question2

A conventional loan is a loan that:

Group of answer choices

follows the secondary market's underwriting guidelines.

is not insured or guaranteed by any government entity.

has the normal seller financing terms.

all of the above.

Question3

A loan that exceeds the maximum amount that FNMA or FHLMC will lend is called a:

Group of answer choices

jumbo loan.

maxi-loan.

titanic loan.

none of the above.

Question4

A mortgage that remains at the same rate for the life of the loan is called:

Group of answer choices

single rate.

fixed rate.

closed rate.

non-assumable.

Question5

A loan that meets the standards of the secondary market (Fannie Mae and Freddie Mac) is called a:

Group of answer choices

government loan.

nonconventional loan.

conforming loan.

none of the above.

Question6

The greatest risk of default is caused by:

Group of answer choices

large down payments.

overpriced housing.

small or no down payments.

none of the above.

7Question

The standard loan-to-value ratio has traditionally been:

Group of answer choices

60%.

70%.

80%.

90%.

Question8

A borrower seeking a conventional loan with a larger LTV than the traditional ratio is required to:

Group of answer choices

have a cosigner on the loan.

make a 50% down payment.

be over the age of 55.

carry private mortgage insurance

Question9

In a loan with negative amortization, the balance owed:

Group of answer choices

decreases over time.

increases over time.

remains the same.

none of the above.

Question10

Private mortgage insurance reduces:

Group of answer choices

the lender's risk of loss in the event of borrower default.

the borrower's risk against rising interest rates.

the seller's risk in the event of a buyer backing out of the sale.

none of the above.

Question11

Alternative financing programs are:

Group of answer choices

popular during times of high interest rates.

unpopular during times of high interest rates.

illegal under RESPA.

none of the above.

Question12

Based on FNMA and FHLMC guidelines, mortgage interest rates are generally limited by lenders to an annual increase of:

Group of answer choices

2%.

20%.

200%.

none of the above.

Question13

The payment of points to the lender at the time a loan is made to reduce the interest rate and lower the borrower's monthly payments is called:

Group of answer choices

meeting the cap.

an index loan.

a buydown.

none of the above.

Question14

A borrower who has a 90% loan at 7.5% interest with a 2% annual interest rate cap must qualify at:

Group of answer choices

8%.

8.5%.

9%.

9.5%.

Question15

"One point" is:

Group of answer choices

$1,000.00.

1% of the sales price.

1% of the loan amount.

none of the above.

Question16

What age must a reverse mortgage borrower be?

Group of answer choices

Over 55

Over 62

Over 65

Over 70

Question17

In a growth equity mortgage (GEM):

Group of answer choices

payments increase annually.

payments decrease annually.

interest rates decrease annually.

none of the above.

Question18

Lenders offering adjustable-rate mortgages must:

Group of answer choices

comply with Regulation Z.

provide the borrower with a general brochure.

make certain specific disclosures.

all of the above.

Question19

The statutory FHA down payment is:

Group of answer choices

3.5%.

10%.

50%.

none of the above.

Question20

An FHA appraiser must:

Group of answer choices

note cosmetic defects only.

provide a Valuation Conditions Form.

provide a Homebuyer's Summary.

note major health and safety deficiencies on the URAR.