HECM Practice| 128 questions| with complete solutions

The HECM Saver was introduced as an option to lower the upfront cost of a HECM by reducing the upfront mortgage insurance premium to: a. 0. b. 0.01% of the Maximum Claim Amount. c. 1% of the Maximum Claim Amount. d. 1.25% of the Maximum Claim Amount. correct answer: b If repairs are required but can be completed after closing, the lender will create a repair set-aside in the amount of: a. 15% of the maximum claim amount. b. 100% of the actual cost of repairs. c. 100% of the estimated cost of repairs. d. 150% of the estimated cost of repairs. correct answer: d TALC rates generally are greatest when borrowers live: a. less than their life expectancies. b. to their full life expectances. c. longer than their life expectancies correct answer: a The net principal limit at closing is: a. a percentage of the maximum claim amount before any funds are set-aside or any fees are paid. b. the credit remaining after all set-asides and fees have been deducted. c. the lesser of the home's appraised value or the lending limit. d. the most HUD will pay on an insurance claim. correct answer: b Mr. Martin is 83 and his wife is 65. If Mrs. Martin is removed from the title to the home, the HECM principal limit would be: er. b. the same. c. larger. correct answer: c T/F Most lenders require that borrowers take a lump sum payment if they choose an adjustable rate and only allow a creditline with a fixed interest rate HECM. correct answer: False T/F Given the same principal limit, a term payment plan will provide a larger monthly payment than a tenure payment plan. correct answer: True HECM term advances: a. are generally larger than tenure advances. b. are monthly payments for a fixed number of months chosen by the lender. c. do not allow unscheduled lump sum draws. correct answer: a