GROUND SCHOOL FINAL EXAM 2026
COMPLETE QUESTIONS AND
ANSWERS PRACTICE SOLUTION
GRADED A+
A HELOC second mortgage may or may not be fully disbursed at closing. Typically, it
has a variable interest rate with an interest only payment. There is a designated draw
period and repayment period. - ANSWERSTrue
On an FHA loa, the upfront MIP should be included when calculating cash-to-close. -
ANSWERSFalse
The Maximum LTV for an FHA purchase is 97%. - ANSWERSFalse
When taking an application for a VA loan on new construction, it is very important to
order the appraisal: - ANSWERSWhen the house is complete
If a student loan payment is deferred, it does not have to be included in the borrower's
ratios. (FNMA/FHLMC) - ANSWERSFalse
Desktop Underwriting (DU) would result in a decision of Approve/Ineligible on a loan
with excellent credit which qualifies as a jumbo loan program. - ANSWERSTrue
What is the borrower reserve requirement, using manual underwriting, for an investment
property? (FHLMC) - ANSWERS6 months PITI for subject property and 2 months for
each additional property
A HELOC loan has an interest only payment. - ANSWERSTrue
Reimbursed business expenses are ___ ____ the borrower's gross income. -
ANSWERSAdded to
The following factors are considered when determining the principal limit (maximum
loan amount) for a reverse mortgage. - ANSWERSAmount of existing mortgage debt,
property value, age of the youngest borrower
A partner's percentage of ownership and earnings can be located on Schedule E part II
of their personal tax return. - ANSWERSFalse
, A borrower must qualify at the note rate on a temporary buy-down, not the start rate. -
ANSWERSTrue
VA Requires connection to a public community water/sewer disposal system if required
by local building, planning, or health authorities. - ANSWERSTrue
A stand-alone is a second mortgage obtained separately from a first mortgage. -
ANSWERSTrue
Which of the following is the correct list of charges included when calculating the
borrower's cash-to-close? - ANSWERSDown payment, closing costs, prepaids, discount
points, MI paid in cash
If a borrower tells you about a liability that is not listed on the credit report, it does not
need to be included on the loan application. - ANSWERSFalse
What is the maximum seller contribution allowed for an investment property at 80%
LTV? - ANSWERS2%
Churning schemes usually involve falsified down payment amounts and falsified
appraisals. - ANSWERSFalse
If a borrower qualifies for an agency loan of $297,750, FHA is a viable option. -
ANSWERSTrue
On an ARM, redisclosure of the Truth in Lending is required if the APR charges more
than ___ %? - ANSWERS.25
A Veteran may be exempt from the VA funding fee if they: - ANSWERSReceive benefits
for a service-related disability.
Your borrowers are purchasing a home for $475,000. They are requesting a $380,000
first mortgage and a $71,250 HELOC. What will their LTV, second mortgage LTV, and
down payment be if structured this way? - ANSWERS80/15/5
A 3-Year ARM adjusts every 3 years. - ANSWERSFalse
A veteran may exchange a portion of their entitlement for cash. - ANSWERSFalse
If a borrower qualifies for an agency loan of $325,000, FNMA is a viable loan option. -
ANSWERSTrue
On an FHA 203(k) Limited program purchase, a borrower is allowed up to ___ for
repairs/renovations. - ANSWERS$35,000
COMPLETE QUESTIONS AND
ANSWERS PRACTICE SOLUTION
GRADED A+
A HELOC second mortgage may or may not be fully disbursed at closing. Typically, it
has a variable interest rate with an interest only payment. There is a designated draw
period and repayment period. - ANSWERSTrue
On an FHA loa, the upfront MIP should be included when calculating cash-to-close. -
ANSWERSFalse
The Maximum LTV for an FHA purchase is 97%. - ANSWERSFalse
When taking an application for a VA loan on new construction, it is very important to
order the appraisal: - ANSWERSWhen the house is complete
If a student loan payment is deferred, it does not have to be included in the borrower's
ratios. (FNMA/FHLMC) - ANSWERSFalse
Desktop Underwriting (DU) would result in a decision of Approve/Ineligible on a loan
with excellent credit which qualifies as a jumbo loan program. - ANSWERSTrue
What is the borrower reserve requirement, using manual underwriting, for an investment
property? (FHLMC) - ANSWERS6 months PITI for subject property and 2 months for
each additional property
A HELOC loan has an interest only payment. - ANSWERSTrue
Reimbursed business expenses are ___ ____ the borrower's gross income. -
ANSWERSAdded to
The following factors are considered when determining the principal limit (maximum
loan amount) for a reverse mortgage. - ANSWERSAmount of existing mortgage debt,
property value, age of the youngest borrower
A partner's percentage of ownership and earnings can be located on Schedule E part II
of their personal tax return. - ANSWERSFalse
, A borrower must qualify at the note rate on a temporary buy-down, not the start rate. -
ANSWERSTrue
VA Requires connection to a public community water/sewer disposal system if required
by local building, planning, or health authorities. - ANSWERSTrue
A stand-alone is a second mortgage obtained separately from a first mortgage. -
ANSWERSTrue
Which of the following is the correct list of charges included when calculating the
borrower's cash-to-close? - ANSWERSDown payment, closing costs, prepaids, discount
points, MI paid in cash
If a borrower tells you about a liability that is not listed on the credit report, it does not
need to be included on the loan application. - ANSWERSFalse
What is the maximum seller contribution allowed for an investment property at 80%
LTV? - ANSWERS2%
Churning schemes usually involve falsified down payment amounts and falsified
appraisals. - ANSWERSFalse
If a borrower qualifies for an agency loan of $297,750, FHA is a viable option. -
ANSWERSTrue
On an ARM, redisclosure of the Truth in Lending is required if the APR charges more
than ___ %? - ANSWERS.25
A Veteran may be exempt from the VA funding fee if they: - ANSWERSReceive benefits
for a service-related disability.
Your borrowers are purchasing a home for $475,000. They are requesting a $380,000
first mortgage and a $71,250 HELOC. What will their LTV, second mortgage LTV, and
down payment be if structured this way? - ANSWERS80/15/5
A 3-Year ARM adjusts every 3 years. - ANSWERSFalse
A veteran may exchange a portion of their entitlement for cash. - ANSWERSFalse
If a borrower qualifies for an agency loan of $325,000, FNMA is a viable loan option. -
ANSWERSTrue
On an FHA 203(k) Limited program purchase, a borrower is allowed up to ___ for
repairs/renovations. - ANSWERS$35,000
