Xinnix SOAR Final Exam/566 Questions
with A+ Graded Answers
FNMA and FHLMC are what type of loan? - -conforming
-the main purpose of the Consumer financial protection bureau (CFPB) is to
help consumers understand the terms of their agreements with financial
companies - -true
-conventional loans are not insured by the federal government - -true
-Agency loans include FHA and VA loans - -true
-the proceeds of a loan for cash out refinance may be used by the borrower
to insure a new pool - -true
-a non-agency loan does not have to conform to FNMA guidelines - -true
-FNMA insured mortgage companies against default - -false
-Fannie Mae purchased FHA loans from mortgage bankers - -true
-FHA mortgages are self insured while conventional mortgages require PMI -
-true
-Ginnie Mae was created to purchase government mortgages on the
secondary market - -false
-prepaid interest to reduce the interest rate over the life of the loan - -
discount points
-Freddie Mac offers balloon mortgages but fannie mae doesn't - -true
-unacceptable borrowers include.. - -life estates, partnerships, non-profit
organizations
-when is a co-signer typically permitted on a conventional loan? - -when the
borrower is putting down at least 10%
-borrower must contribute how much if the LTV is greater than 80%? (FNMA)
- -5%
-maximum ratios for occupant borrower alone cannot exceed... - -35/43%
,-DU is the automated system for.. - -fannie mae
-LPA is the system for - -freddie mac
-the higher the credit score, the lower potential for delinquency - -true
-the most accurate credit report - -RMCR- residential mortgage credit report
-an in file credit report contains only current information about the
borrowers credit - -false
-chapter 13 bankruptcy allows for a 3-5 year repayment plan - -true
-credit report is ordered at the end of the process just before it goes to the
underwriter - -false
-Permanent and non permanent resident aliens are eligible for mortgage
financing typically under the same terms as US citizens - -true
-On a purchase transaction, the co-borrower does not have to be listed as a
purchaser on the sales contract - -false
-A 3/1 arm will usually have a higher interest rate than a 10/1 arm - -false
-Typically, what is the qualifying rate on a 1-year ARM with a 2/6 caps and a
start rate of 4.5? The fully indexed rate is 6.375% - -6.5%
-The fully indexed rate on an adjustable rate mortgage is calculated based
on? - -index+margin
-When several risk factors are present in one file, it is called ____ and is an
indicator of the likelihood of default? - -layered risk
-a ch. 7 bankruptcy - -wipes out debt completely
-5/25 balloon - -The loan is fixed for 5 years and then the note is due
(balloons) or the customer chooses to extend.
-on a 7/1 ARM you qualify based on the start rate - -true
-The qualifying rate for an ARM with an initial fixed rate period of five years
or less is generally the greater of 2% above the start rate/ or the fully
indexed rate - -true
, -Negative amortization occurs when the combination of interest rate
adjustments and payment caps result in monthly payments that do not cover
the monthly interest due - -true
-How much does a 2/1 buydown typically cost on a conventional loan? - -2.5
discount points
-on a scale from 450-850, 700 is considered a very low credit score - -false
-On a conventional mortgage, a lender may use a higher ratio when there
are fully documented compensating factors that justify using the higher ratio
and or the DU/LPA issues the approval - -true
-You do not count installment debts if they have less than 10 mo - -true
-In qualifying on conventional loans, should legal debts be counted in the
ratios regardless of duration? - -false
-which agency has a 41 back ratio only - -VA
-FHA published qualifying ratios - -31/43
-VA is not strict regarding job security - -false
-PITI - -principal, interest, taxes, insurance
-ways to determine HOI - -- ask borrower if they have gotten a quote
- estimate by calculations
-HOI calculations - -sales price x .3 = annual HOI
-when is PMI required? - -when borrower puts less than 20% down
-95% LTV is riskier than 90% LTV because the borrower has less of their
funds invested - -true
-1 year ARM is riskier than a 30-year fixed rate loan - -true
-home inspection is included in cash to close - -false
-When calculating a quick version of cash to close, the prepaids portion is
what percentage of sales price? - -1-1.5%
-subordinate financing - -any loan type, secured by borrowers property,
recorded after first lien.. convenient way for borrowers to avoid MI//pay off
debt
, -customer profile of fixed-rate second mortgage - -conservative, traditional
borrowers who do not like ARMs
borrowers ballin on a budget
5-10% for down payment
-second mortgage allows to avoid MI, lower monthly payments, control cash
flow, and have continual access to the equity in our home as you pay down
your loan balance - -equity line
-The second mortgage works like a credit card. It will provide for a maximum
loan amount that may or may not be fully disbursed at closing - -home
equity line of credit
-another name for a true second mortgage - -fixed-rate second
-NOT a characteristic of a true second mortgage - -fixed prepaids
-When a second mortgage is obtained at the same time as a first mortgage,
there are never any closing costs associated with the second - -false
-In the marketplace, subordinate financing is often referred to by other
names. Which is not one? - -investment mortgage
-Simultaneous is the term used when the second mortgage closes at the
same time as the first mortgage - -true
-Most lenders offering second mortgages utilize private investors that have
more restrictive guidelines than agency loans, therefore AUS findings will not
always be valid for both loans - -true
-Second mortgages are typically credit score sensitive - -true
-Stand-alone is the term used when a second mortgage is being obtained
separately from a first mortgage - -true
-A subordination agreement is required on every loan that has secondary
financing - -false
-what makes up cash to close? - -down payment
closing costs
prepaids
discount points
with A+ Graded Answers
FNMA and FHLMC are what type of loan? - -conforming
-the main purpose of the Consumer financial protection bureau (CFPB) is to
help consumers understand the terms of their agreements with financial
companies - -true
-conventional loans are not insured by the federal government - -true
-Agency loans include FHA and VA loans - -true
-the proceeds of a loan for cash out refinance may be used by the borrower
to insure a new pool - -true
-a non-agency loan does not have to conform to FNMA guidelines - -true
-FNMA insured mortgage companies against default - -false
-Fannie Mae purchased FHA loans from mortgage bankers - -true
-FHA mortgages are self insured while conventional mortgages require PMI -
-true
-Ginnie Mae was created to purchase government mortgages on the
secondary market - -false
-prepaid interest to reduce the interest rate over the life of the loan - -
discount points
-Freddie Mac offers balloon mortgages but fannie mae doesn't - -true
-unacceptable borrowers include.. - -life estates, partnerships, non-profit
organizations
-when is a co-signer typically permitted on a conventional loan? - -when the
borrower is putting down at least 10%
-borrower must contribute how much if the LTV is greater than 80%? (FNMA)
- -5%
-maximum ratios for occupant borrower alone cannot exceed... - -35/43%
,-DU is the automated system for.. - -fannie mae
-LPA is the system for - -freddie mac
-the higher the credit score, the lower potential for delinquency - -true
-the most accurate credit report - -RMCR- residential mortgage credit report
-an in file credit report contains only current information about the
borrowers credit - -false
-chapter 13 bankruptcy allows for a 3-5 year repayment plan - -true
-credit report is ordered at the end of the process just before it goes to the
underwriter - -false
-Permanent and non permanent resident aliens are eligible for mortgage
financing typically under the same terms as US citizens - -true
-On a purchase transaction, the co-borrower does not have to be listed as a
purchaser on the sales contract - -false
-A 3/1 arm will usually have a higher interest rate than a 10/1 arm - -false
-Typically, what is the qualifying rate on a 1-year ARM with a 2/6 caps and a
start rate of 4.5? The fully indexed rate is 6.375% - -6.5%
-The fully indexed rate on an adjustable rate mortgage is calculated based
on? - -index+margin
-When several risk factors are present in one file, it is called ____ and is an
indicator of the likelihood of default? - -layered risk
-a ch. 7 bankruptcy - -wipes out debt completely
-5/25 balloon - -The loan is fixed for 5 years and then the note is due
(balloons) or the customer chooses to extend.
-on a 7/1 ARM you qualify based on the start rate - -true
-The qualifying rate for an ARM with an initial fixed rate period of five years
or less is generally the greater of 2% above the start rate/ or the fully
indexed rate - -true
, -Negative amortization occurs when the combination of interest rate
adjustments and payment caps result in monthly payments that do not cover
the monthly interest due - -true
-How much does a 2/1 buydown typically cost on a conventional loan? - -2.5
discount points
-on a scale from 450-850, 700 is considered a very low credit score - -false
-On a conventional mortgage, a lender may use a higher ratio when there
are fully documented compensating factors that justify using the higher ratio
and or the DU/LPA issues the approval - -true
-You do not count installment debts if they have less than 10 mo - -true
-In qualifying on conventional loans, should legal debts be counted in the
ratios regardless of duration? - -false
-which agency has a 41 back ratio only - -VA
-FHA published qualifying ratios - -31/43
-VA is not strict regarding job security - -false
-PITI - -principal, interest, taxes, insurance
-ways to determine HOI - -- ask borrower if they have gotten a quote
- estimate by calculations
-HOI calculations - -sales price x .3 = annual HOI
-when is PMI required? - -when borrower puts less than 20% down
-95% LTV is riskier than 90% LTV because the borrower has less of their
funds invested - -true
-1 year ARM is riskier than a 30-year fixed rate loan - -true
-home inspection is included in cash to close - -false
-When calculating a quick version of cash to close, the prepaids portion is
what percentage of sales price? - -1-1.5%
-subordinate financing - -any loan type, secured by borrowers property,
recorded after first lien.. convenient way for borrowers to avoid MI//pay off
debt
, -customer profile of fixed-rate second mortgage - -conservative, traditional
borrowers who do not like ARMs
borrowers ballin on a budget
5-10% for down payment
-second mortgage allows to avoid MI, lower monthly payments, control cash
flow, and have continual access to the equity in our home as you pay down
your loan balance - -equity line
-The second mortgage works like a credit card. It will provide for a maximum
loan amount that may or may not be fully disbursed at closing - -home
equity line of credit
-another name for a true second mortgage - -fixed-rate second
-NOT a characteristic of a true second mortgage - -fixed prepaids
-When a second mortgage is obtained at the same time as a first mortgage,
there are never any closing costs associated with the second - -false
-In the marketplace, subordinate financing is often referred to by other
names. Which is not one? - -investment mortgage
-Simultaneous is the term used when the second mortgage closes at the
same time as the first mortgage - -true
-Most lenders offering second mortgages utilize private investors that have
more restrictive guidelines than agency loans, therefore AUS findings will not
always be valid for both loans - -true
-Second mortgages are typically credit score sensitive - -true
-Stand-alone is the term used when a second mortgage is being obtained
separately from a first mortgage - -true
-A subordination agreement is required on every loan that has secondary
financing - -false
-what makes up cash to close? - -down payment
closing costs
prepaids
discount points
