HECM Test Questions and Answers|
Latest Update
When does a borrower have access to the proceeds of their reverse mortgage?
A. Immediately following the closing of the loan
B. After the 3 day rescission period
C. 1st day of the calendar month following closing
D. When the existing liens on the property are paid in full B
What is the late penalty paid to the borrower if the lender is late with their payment?
A. $100
B. 1% of the payment amount
C. 5% of the payment amount
D. 10% of the payment amount D
Monthly payments from the lender to the borrower must be made by
A. 1st calendar day of the month
B. 5th calendar day of the month
C. 15th calendar day of the month
D. Last calendar day of the month A
Mr. Orr wants to change his tenure payment plan into a term payment plan. Which of the
following is true?
A. A lender can charge up to $20 to the borrower to make the change
B. Mr. Orr must refinance his loan
C. There is no option to change payment plans
D. Mr. Orr can only change the payment plan if he currently has a line of credit D
,Line of Credit payments must be paid to the borrower within
A. 5 calendar days of the request
B. 5 business days of the request
C. 7 business days of the request
D. 10 calendar days of the request B
A credit line grows with the___.
A. Initial interest rate
B. Expected interest rate
C. Current interest rate
D. A credit line will not grow C
Mrs. Gallo is expected to close on her reverse mortgage in July of 2012. Her date of birth is
December 15, 1920. What age is used to calculate her principal limit?
A. 90
B. 91
C. 92
D. Not enough information provided C
Tenure payments will stop ___.
A. When the borrower reaches 100 years old
B. When the borrower dies or moves away from the home permanently .
C. When the outstanding loan balance exceeds the value of the home
D. Only at the borrower's request B
Which of the following is not one of the three key pieces of information that are needed to
calculate a borrower's principal limit?
, A. Appraised value
B. Date of Birth
C. Current interest rate
D. Expected interest rate C
T/F The present value of a fixed monthly servicing fee of $25, given a term of 300 months and a
compounding rate of .0825 divided by 12 is $3,192.58. This amount should be subtracted from
the principal limit to arrive at the net principal limit that is used for determining monthly
payments or a line of credit. TRUE
T/F The length of a term payment is the number of years multiplied by 12. TRUE
Susan Poorson has chosen the tenure plan. She is 80 years old. Her home is valued at $760,000.
What is the length of her tenure term?
A. 200 months
B. 215 months
C. 220 months
D. 240 months D
T/F State law requires the mortgage to reflect a maximum mortgage amount, therefore the
lender must use an amount that is equal to 125% of the maximum claim amount. FALSE
T/F The term "note" as used in this chapter includes any form of security instrument commonly
used in a jurisdiction in connection with loans secured by residential property. FALSE
What is the reason for the mortgage reflecting a figure higher than the maximum claim
amount?
A. The loan payments are secured not only by the current value of the house but also by any
possible appreciation in value.
Latest Update
When does a borrower have access to the proceeds of their reverse mortgage?
A. Immediately following the closing of the loan
B. After the 3 day rescission period
C. 1st day of the calendar month following closing
D. When the existing liens on the property are paid in full B
What is the late penalty paid to the borrower if the lender is late with their payment?
A. $100
B. 1% of the payment amount
C. 5% of the payment amount
D. 10% of the payment amount D
Monthly payments from the lender to the borrower must be made by
A. 1st calendar day of the month
B. 5th calendar day of the month
C. 15th calendar day of the month
D. Last calendar day of the month A
Mr. Orr wants to change his tenure payment plan into a term payment plan. Which of the
following is true?
A. A lender can charge up to $20 to the borrower to make the change
B. Mr. Orr must refinance his loan
C. There is no option to change payment plans
D. Mr. Orr can only change the payment plan if he currently has a line of credit D
,Line of Credit payments must be paid to the borrower within
A. 5 calendar days of the request
B. 5 business days of the request
C. 7 business days of the request
D. 10 calendar days of the request B
A credit line grows with the___.
A. Initial interest rate
B. Expected interest rate
C. Current interest rate
D. A credit line will not grow C
Mrs. Gallo is expected to close on her reverse mortgage in July of 2012. Her date of birth is
December 15, 1920. What age is used to calculate her principal limit?
A. 90
B. 91
C. 92
D. Not enough information provided C
Tenure payments will stop ___.
A. When the borrower reaches 100 years old
B. When the borrower dies or moves away from the home permanently .
C. When the outstanding loan balance exceeds the value of the home
D. Only at the borrower's request B
Which of the following is not one of the three key pieces of information that are needed to
calculate a borrower's principal limit?
, A. Appraised value
B. Date of Birth
C. Current interest rate
D. Expected interest rate C
T/F The present value of a fixed monthly servicing fee of $25, given a term of 300 months and a
compounding rate of .0825 divided by 12 is $3,192.58. This amount should be subtracted from
the principal limit to arrive at the net principal limit that is used for determining monthly
payments or a line of credit. TRUE
T/F The length of a term payment is the number of years multiplied by 12. TRUE
Susan Poorson has chosen the tenure plan. She is 80 years old. Her home is valued at $760,000.
What is the length of her tenure term?
A. 200 months
B. 215 months
C. 220 months
D. 240 months D
T/F State law requires the mortgage to reflect a maximum mortgage amount, therefore the
lender must use an amount that is equal to 125% of the maximum claim amount. FALSE
T/F The term "note" as used in this chapter includes any form of security instrument commonly
used in a jurisdiction in connection with loans secured by residential property. FALSE
What is the reason for the mortgage reflecting a figure higher than the maximum claim
amount?
A. The loan payments are secured not only by the current value of the house but also by any
possible appreciation in value.
