Loan Signing Test 5; CORRECTLY SOLVED

The consumer Financial Protection Bureau is responsible for implementing the "TILA- RESPA Integrated Disclosure" (TRID) rule. correct answers True What is an Adjustable Rate Mortgage- ARM? correct answers A loan that offers a short introductory period with a low, fixed interest rate. After that period usually two to five years, sometimes more the rate becomes adjustable, up to a certain limit. What is a balloon loan? correct answers Short term loan with payments amortized over a longer period of time. These payments are not sufficient to pay off the loan in full within the term of the loan. The remaining balance, known as balloon payment, is due in full at maturity of the note. How is the monthly mortgage payment applied to the loan? correct answers The monthly mortgage payment can be used to pay the interest, and escrow. The TRID rule went into effect on the following date in 2015: correct answers October 3, 2015 A Notary Signing Agent or NSA is a Notary Public who has special training to handle loan document signings. Title companies and signing services hire NSA to deliver loan document to borrowers, oversee the signing and return the documents. correct answers True What is mortgage insurance? correct answers Mortgage insurance protects the lender against taking a financial loss in the event the mortgagor stops making payments. IS there a way to avoid mortgage insurance? correct answers Mortgage insurance can be avoided by utilizing loan programs such as an 80/20, in which a 1st mortgage (80% LTV) and 2nd mortgage (20% LTV) are taken on the property. No down payment is required. Mortgage insurance can be avoided by utilizing loan programs such as an the lender Paid Mortgage Insurance (LPM). With this option the lender pays the mortgage insurance, which is offset by a higher interest rate charged to the borrower. Mortgage insurance can be avoided by making a down payment greater than 20% of the entire loan amount. What is a discount point? correct answers A percentage of the loan amount. It is paid to the lender to buy down or lower an interest rate. When is a mortgage insurance required? correct answers It is required on mortgage programs that require little or no down payment and the lenders exposure is greater than 80% of the purchase price of appraised value, whichever is less. What is a fixed rate mortgage? correct answers With a fixed rate mortgage, the interest rate is set when you take out the loan and will not change.