Mortgages - Chapter 8 Exam
Questions & Answers (Grade A+)
What is the maximum conforming loan for single family house? -
correct answer ✅$453,100 for most places, and $679,650 for
alaska, hawaii, guam and US virgin islands
What is the term of a borrower that does not meet the minimum
fannie mae/freddit mac borrower? -
correct answer ✅b/c borrower: bankruptcies, unpaid bills, low
credit scores etc
what are Alt-A loans? -
correct answer ✅loans for borrowers that have good credit and
can close with different documentation standards (verbal
employment verification vs W2s)
What are A-Minus loans? -
correct answer ✅loans for borrowers with less than perfect credit
scores (late payments, limited down payment, high DTI ratio,
bankruptcy or foreclosure)
what is a point? -
correct answer ✅one percentage point
,Mortgages - Chapter 8 Exam
Questions & Answers (Grade A+)
what are discount points? -
correct answer ✅money paid to decrease buy down interest rate
What is the difference between permanent buydown vs temporary
buydown? -
correct answer ✅Permanent buydown permanently reduces the
interest rate and thus loan payments. Temporary buydown are
funds that will reduce the monthly payment buy using the piggy
bank to cover the difference. Once the piggy bank is gone, the
payment is back to full.
what is an interested party contributions (IPCs)? -
correct answer ✅anyone other than the buyer who has financial
interest in the subject property
what is the FHA limit of IPC contribution? -
correct answer ✅6% of the lower of appraisal price or sale price
what is the VA limit of IPC contribution? -
correct answer ✅4% limit of the lower of appraisal price or sale
price for seller payment but otherwise no limit
, Mortgages - Chapter 8 Exam
Questions & Answers (Grade A+)
How are the cost of discount pts calculated? -
correct answer ✅as percentage of the loan. So 2 discount pts = 2%
of the loan
What is the maximum contribution of IPCs for investment
properties? -
correct answer ✅2%
What is the Fannie Mae and Freddie Mac IPC limits for principal
residences and second homes based on LTV? -
correct answer ✅for <90%, Max 3% contribution
75.01% - 90%, 6% contribution
<75%, 9% contribution
What is an ARM Mortgage and what situations does it benefit? -
correct answer ✅Adjustable Rate Mortgage; to more easily qualify
for loan, and afford a higher priced house
What are the 5 components of ARM loans? -
correct answer ✅Index, Margin, Rate Adjustment Period, Interest
rate cap/floor (optional), Conversion option (optional)
Questions & Answers (Grade A+)
What is the maximum conforming loan for single family house? -
correct answer ✅$453,100 for most places, and $679,650 for
alaska, hawaii, guam and US virgin islands
What is the term of a borrower that does not meet the minimum
fannie mae/freddit mac borrower? -
correct answer ✅b/c borrower: bankruptcies, unpaid bills, low
credit scores etc
what are Alt-A loans? -
correct answer ✅loans for borrowers that have good credit and
can close with different documentation standards (verbal
employment verification vs W2s)
What are A-Minus loans? -
correct answer ✅loans for borrowers with less than perfect credit
scores (late payments, limited down payment, high DTI ratio,
bankruptcy or foreclosure)
what is a point? -
correct answer ✅one percentage point
,Mortgages - Chapter 8 Exam
Questions & Answers (Grade A+)
what are discount points? -
correct answer ✅money paid to decrease buy down interest rate
What is the difference between permanent buydown vs temporary
buydown? -
correct answer ✅Permanent buydown permanently reduces the
interest rate and thus loan payments. Temporary buydown are
funds that will reduce the monthly payment buy using the piggy
bank to cover the difference. Once the piggy bank is gone, the
payment is back to full.
what is an interested party contributions (IPCs)? -
correct answer ✅anyone other than the buyer who has financial
interest in the subject property
what is the FHA limit of IPC contribution? -
correct answer ✅6% of the lower of appraisal price or sale price
what is the VA limit of IPC contribution? -
correct answer ✅4% limit of the lower of appraisal price or sale
price for seller payment but otherwise no limit
, Mortgages - Chapter 8 Exam
Questions & Answers (Grade A+)
How are the cost of discount pts calculated? -
correct answer ✅as percentage of the loan. So 2 discount pts = 2%
of the loan
What is the maximum contribution of IPCs for investment
properties? -
correct answer ✅2%
What is the Fannie Mae and Freddie Mac IPC limits for principal
residences and second homes based on LTV? -
correct answer ✅for <90%, Max 3% contribution
75.01% - 90%, 6% contribution
<75%, 9% contribution
What is an ARM Mortgage and what situations does it benefit? -
correct answer ✅Adjustable Rate Mortgage; to more easily qualify
for loan, and afford a higher priced house
What are the 5 components of ARM loans? -
correct answer ✅Index, Margin, Rate Adjustment Period, Interest
rate cap/floor (optional), Conversion option (optional)
