HECM TEST 2026 COMPREHENSIVE STUDY
GUIDE COMPLETE SOLUTIONS VERIFIED
◉ T/F Unlike a traditional mortgage, the closing costs of a HECM are
taken out of the loan proceeds. Answer: True
◉ T/F The borrower does not pay any interest on any of the closing
costs that were taken out of the loan proceeds. Answer: False
◉ A borrower has a $200,000 home value. What is the likely upfront
cost added to the loan balance at closing? (Revisit. Where is the
formula?)
A. $7,000
B. $10,000
C. $15,000
D. $20,000. Answer: B
◉ Monthly adjustable rates can't adjust by more than___.
A. Two percentage points per year
B.Five percentage points per year
C. Two percentage points over the life of the loan
D. Ten percentage points over the life of the loan. Answer: D
,◉ Borrowers with delinquent federal debt are not eligible for a
HECM___.
A. Ever
B. Until the debt is satisfied
C. For 2 years after the debt is satisfied
D. For 7 years after the debt is satisfied. Answer: B
◉ A lender must screen all borrowers on which of the following:
A. LDP
B. GSA
C. CAIVRS
D. All of the above. Answer: D
◉ A borrower must be what age before signing a loan application in
order to receive a HECM?
A. 60
B. 61
C. 62
D. 63. Answer: B
, ◉ T/F Only one HECM borrower must be living in the home in order
for the HECM loan to close.. Answer: True
◉ When is a borrower able to close in the name of a Living Trust for
a HECM?
A. When all the beneficiaries of the trust are eligible HECM
borrowers
B. When all the trustees of the trust are eligible HECM borrowers
C. Both a and b above
D. Can't be done. Answer: A
◉ T/F A Durable Power of Attorney is not permitted on HECM loans;
only a court appointed Guardianship.. Answer: False
◉ A borrower's appraised value is $750,000. What is the required
title insurance amount?
A. $750,000
B. $525,000
C. $625,500
D. Not enough information to answer the question. Answer: A
◉ T/F Generally, unsecured debts other than delinquent Federal
debts (i.e. credit card debt), regardless of their status should not
impact negatively on the borrower's eligibility.. Answer: True
GUIDE COMPLETE SOLUTIONS VERIFIED
◉ T/F Unlike a traditional mortgage, the closing costs of a HECM are
taken out of the loan proceeds. Answer: True
◉ T/F The borrower does not pay any interest on any of the closing
costs that were taken out of the loan proceeds. Answer: False
◉ A borrower has a $200,000 home value. What is the likely upfront
cost added to the loan balance at closing? (Revisit. Where is the
formula?)
A. $7,000
B. $10,000
C. $15,000
D. $20,000. Answer: B
◉ Monthly adjustable rates can't adjust by more than___.
A. Two percentage points per year
B.Five percentage points per year
C. Two percentage points over the life of the loan
D. Ten percentage points over the life of the loan. Answer: D
,◉ Borrowers with delinquent federal debt are not eligible for a
HECM___.
A. Ever
B. Until the debt is satisfied
C. For 2 years after the debt is satisfied
D. For 7 years after the debt is satisfied. Answer: B
◉ A lender must screen all borrowers on which of the following:
A. LDP
B. GSA
C. CAIVRS
D. All of the above. Answer: D
◉ A borrower must be what age before signing a loan application in
order to receive a HECM?
A. 60
B. 61
C. 62
D. 63. Answer: B
, ◉ T/F Only one HECM borrower must be living in the home in order
for the HECM loan to close.. Answer: True
◉ When is a borrower able to close in the name of a Living Trust for
a HECM?
A. When all the beneficiaries of the trust are eligible HECM
borrowers
B. When all the trustees of the trust are eligible HECM borrowers
C. Both a and b above
D. Can't be done. Answer: A
◉ T/F A Durable Power of Attorney is not permitted on HECM loans;
only a court appointed Guardianship.. Answer: False
◉ A borrower's appraised value is $750,000. What is the required
title insurance amount?
A. $750,000
B. $525,000
C. $625,500
D. Not enough information to answer the question. Answer: A
◉ T/F Generally, unsecured debts other than delinquent Federal
debts (i.e. credit card debt), regardless of their status should not
impact negatively on the borrower's eligibility.. Answer: True
