Freddie Mac - Credit Smart
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing
payment, which includes: - answer Principal, interest, property taxes, homeowner's
insurance, mortgage insurance, homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts. - answerFalse
The principal amount is the total amount borrowed. - answerTrue
Do lenders use gross income or net profits when calculating mortgage affordability for
self-employed borrowers? - answerNet profits
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments. - answerFalse
Having adequate cash reserves demonstrates to your lender that you have responsibly
managed your money and have savings and other assets to fall back on in case of
emergency. - answerTrue
Capital - or cash to close - refers to the funds you need to save in order to cover the
cost of down payment and closing costs. - answerTrue
Acceptable sources of capital include: - answerFunds from a family member, funds from
a down payment assistance program or funds from your savings account
Lenders consider investments to be (select all that apply): - answerLenders consider
investments to be IRAs, bonds, CDs, stocks and 401(k) plans.
To determine if you have adequate savings to obtain a mortgage and sustain
homeownership, lenders will average the last six months of your checking and savings
account balances. - answerFalse
Lenders consider four primary factors when determining whether to approve a loan - the
4 C's of lending. What are they? - answerCredit, Capacity, Capital and Collateral
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments. - answerTrue
Lenders generally don't have any guidelines or restrictions when it comes to the home
you want to purchase or its condition, provided you have good credit. - answerFalse
, The home inspection is ordered through the lender and determines the market value of
the home. - answerFalse
Manufactured homes are the same as mobile homes and don't need to meet federal
construction and safety standards. - answerFalse
If you make extra payments on your loan, that can help pay down the principal faster
and thus greatly reduce the interest due on the loan. - answerTrue
Government insured loans, such as FHA loans, are the only low down payment
mortgages available to homebuyers. - answerFalse
A fixed-rate mortgage is a loan where the interest rate stays the same for the life of the
loan. - answerTrue
Which of the following loans are guaranteed by the federal government (select all that
apply): - answerVA, USDA, FHA
There may be special loan products and first-time homebuyer or affordable
homeownership programs available in your community and it's worth calling your local
lenders, credit unions and housing counseling agencies to find out about your options. -
answerTrue
What percentage of the purchase price is required as a down payment for conventional
conforming loans to avoid paying private mortgage insurance? - answer20%
Private mortgage insurance protects the borrower if they can't make their mortgage
payment. - answerFalse
It's okay to borrow money from a family member for your down payment, as long as you
pay the family member back. - answerFalse
You will need to repay the seller any property or school taxes that they have already
paid on the property. - answerTrue
LTV stands for loan-to-value and indicates the amount of the loan you owe as a
percentage of the value of the property. - answerTrue
The Annual Percentage Rate (APR) is the same as the interest rate. - answerFalse
The mortgage loan process occurs in the following order: - answerPre-qualification or
pre-approval, loan application, loan processing, loan underwriting, loan approval or
denial.
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing
payment, which includes: - answer Principal, interest, property taxes, homeowner's
insurance, mortgage insurance, homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts. - answerFalse
The principal amount is the total amount borrowed. - answerTrue
Do lenders use gross income or net profits when calculating mortgage affordability for
self-employed borrowers? - answerNet profits
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments. - answerFalse
Having adequate cash reserves demonstrates to your lender that you have responsibly
managed your money and have savings and other assets to fall back on in case of
emergency. - answerTrue
Capital - or cash to close - refers to the funds you need to save in order to cover the
cost of down payment and closing costs. - answerTrue
Acceptable sources of capital include: - answerFunds from a family member, funds from
a down payment assistance program or funds from your savings account
Lenders consider investments to be (select all that apply): - answerLenders consider
investments to be IRAs, bonds, CDs, stocks and 401(k) plans.
To determine if you have adequate savings to obtain a mortgage and sustain
homeownership, lenders will average the last six months of your checking and savings
account balances. - answerFalse
Lenders consider four primary factors when determining whether to approve a loan - the
4 C's of lending. What are they? - answerCredit, Capacity, Capital and Collateral
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments. - answerTrue
Lenders generally don't have any guidelines or restrictions when it comes to the home
you want to purchase or its condition, provided you have good credit. - answerFalse
, The home inspection is ordered through the lender and determines the market value of
the home. - answerFalse
Manufactured homes are the same as mobile homes and don't need to meet federal
construction and safety standards. - answerFalse
If you make extra payments on your loan, that can help pay down the principal faster
and thus greatly reduce the interest due on the loan. - answerTrue
Government insured loans, such as FHA loans, are the only low down payment
mortgages available to homebuyers. - answerFalse
A fixed-rate mortgage is a loan where the interest rate stays the same for the life of the
loan. - answerTrue
Which of the following loans are guaranteed by the federal government (select all that
apply): - answerVA, USDA, FHA
There may be special loan products and first-time homebuyer or affordable
homeownership programs available in your community and it's worth calling your local
lenders, credit unions and housing counseling agencies to find out about your options. -
answerTrue
What percentage of the purchase price is required as a down payment for conventional
conforming loans to avoid paying private mortgage insurance? - answer20%
Private mortgage insurance protects the borrower if they can't make their mortgage
payment. - answerFalse
It's okay to borrow money from a family member for your down payment, as long as you
pay the family member back. - answerFalse
You will need to repay the seller any property or school taxes that they have already
paid on the property. - answerTrue
LTV stands for loan-to-value and indicates the amount of the loan you owe as a
percentage of the value of the property. - answerTrue
The Annual Percentage Rate (APR) is the same as the interest rate. - answerFalse
The mortgage loan process occurs in the following order: - answerPre-qualification or
pre-approval, loan application, loan processing, loan underwriting, loan approval or
denial.
