REE 3043 Ch 10 Exam Questions &
Answers (Grade A+)
Common sources of a home equity loan can include: -
correct answer ✅savings institutions
credit unions
commercial banks
A conventional home mortgage that meets all of the requirements
to be purchased by Fannie Mae or Freddie Mac is called a _____
conventional mortgage. -
correct answer ✅Conforming
The FHA provides insurance against losses due to default on
mortgages made by ___ lenders, with the insurance premium paid
by the ___. -
correct answer ✅Private
Borrower
Two polar classes of conventional mortgage loans are ___ and ___.
-
correct answer ✅Prime
Subprime
,REE 3043 Ch 10 Exam Questions &
Answers (Grade A+)
Under 2017 U.S. income tax law, it has been estimated that
________ percent of all homeowner households will receive
income tax deductions for the home mortgage interest that they
pay. -
correct answer ✅15
The interest rate on a home equity line of credit normally is ___ ,
based on the prime rate as published in the Wall Street Journal. -
correct answer ✅Adjustable
Loans eligible for purchase by Fannie Mae and Freddie Mac are
much more ___, resulting in a lower contract ___ ___, and more
___terms across lenders and regions. -
correct answer ✅Liquid
Interest
Rate
Uniform / Equal
Valid statements about FHA insurance include:
1.)FHA insures loans up to 96.5 percent of value.
, REE 3043 Ch 10 Exam Questions &
Answers (Grade A+)
2.)FHA requires longer time than conventional lenders to qualify for
a new mortgage after bankruptcy or default.
3.)FHA targets first-time home buyers and other moderate income
households.
4.)FHA accepts more tolerant qualifying ratios and credit score than
for conventional mortgages. -
correct answer ✅1
3
4
Any standard home loan that is not insured or guaranteed by an
agency of the US government is a ___ mortgage loan. -
correct answer ✅conventional
Whether you should conduct refinancing analysis on a before tax
basis or after tax basis depends on two considerations in US income
tax law. You should use before tax analysis if:
1.) you itemize deductions, but your total deductions, including
interest, are little more than the standard deduction.
2.) you file your income taxes separately, or you have few
dependents, or you are subject to the alternative minimum tax.
Answers (Grade A+)
Common sources of a home equity loan can include: -
correct answer ✅savings institutions
credit unions
commercial banks
A conventional home mortgage that meets all of the requirements
to be purchased by Fannie Mae or Freddie Mac is called a _____
conventional mortgage. -
correct answer ✅Conforming
The FHA provides insurance against losses due to default on
mortgages made by ___ lenders, with the insurance premium paid
by the ___. -
correct answer ✅Private
Borrower
Two polar classes of conventional mortgage loans are ___ and ___.
-
correct answer ✅Prime
Subprime
,REE 3043 Ch 10 Exam Questions &
Answers (Grade A+)
Under 2017 U.S. income tax law, it has been estimated that
________ percent of all homeowner households will receive
income tax deductions for the home mortgage interest that they
pay. -
correct answer ✅15
The interest rate on a home equity line of credit normally is ___ ,
based on the prime rate as published in the Wall Street Journal. -
correct answer ✅Adjustable
Loans eligible for purchase by Fannie Mae and Freddie Mac are
much more ___, resulting in a lower contract ___ ___, and more
___terms across lenders and regions. -
correct answer ✅Liquid
Interest
Rate
Uniform / Equal
Valid statements about FHA insurance include:
1.)FHA insures loans up to 96.5 percent of value.
, REE 3043 Ch 10 Exam Questions &
Answers (Grade A+)
2.)FHA requires longer time than conventional lenders to qualify for
a new mortgage after bankruptcy or default.
3.)FHA targets first-time home buyers and other moderate income
households.
4.)FHA accepts more tolerant qualifying ratios and credit score than
for conventional mortgages. -
correct answer ✅1
3
4
Any standard home loan that is not insured or guaranteed by an
agency of the US government is a ___ mortgage loan. -
correct answer ✅conventional
Whether you should conduct refinancing analysis on a before tax
basis or after tax basis depends on two considerations in US income
tax law. You should use before tax analysis if:
1.) you itemize deductions, but your total deductions, including
interest, are little more than the standard deduction.
2.) you file your income taxes separately, or you have few
dependents, or you are subject to the alternative minimum tax.
