REE4204 FINAL EXAM QUESTIONS AND ANSWERS
A mortgage applicant makes $6,000 gross income per month. The bank estimated the
conventional loan requires monthly payment of $1160, plus $400 per month escrow
toward property tax and insurance. The borrower currently has no other debt except a
car loan payment of $510 per month and he lives in florida so there is no state and local
income tax. Assuming his credit record and other aspects are all satisfactory, which of
the following is likely the underwriting conclusion based on these numbers? - ✔✔He
qualifies for the loan only if he can afford more than 5% of down payment
FHA mortgage insurance - ✔✔None of the above
Which of the following statements is TRUE? - ✔✔The maximum loan amount of a
conventional loan is about $417,000 in most countries
A house is financed with conventional at 95% loan to value ratio. Therefore a private
mortgage insurance is required. What is the coverage ratio of the PMI? - ✔✔21%
From the buyers perspective, which of the following types of deeds offers the most
protection? - ✔✔Genereal warranty
A policy that insures the title received by the grantee against deficiencies that may have
been in existence at the time the title was transferred is known as - ✔✔title
insurance
Which of the following is NOT a characteristic of title insurance? - ✔✔The policy is
transferable to a new owner
A mortgage applicant makes $6,000 gross income per month. The bank estimated the
conventional loan requires monthly payment of $1160, plus $400 per month escrow
toward property tax and insurance. The borrower currently has no other debt except a
car loan payment of $510 per month and he lives in florida so there is no state and local
income tax. Assuming his credit record and other aspects are all satisfactory, which of
the following is likely the underwriting conclusion based on these numbers? - ✔✔He
qualifies for the loan only if he can afford more than 5% of down payment
FHA mortgage insurance - ✔✔None of the above
Which of the following statements is TRUE? - ✔✔The maximum loan amount of a
conventional loan is about $417,000 in most countries
A house is financed with conventional at 95% loan to value ratio. Therefore a private
mortgage insurance is required. What is the coverage ratio of the PMI? - ✔✔21%
From the buyers perspective, which of the following types of deeds offers the most
protection? - ✔✔Genereal warranty
A policy that insures the title received by the grantee against deficiencies that may have
been in existence at the time the title was transferred is known as - ✔✔title
insurance
Which of the following is NOT a characteristic of title insurance? - ✔✔The policy is
transferable to a new owner
