HECM Practice exam questions and answers

HECM Practice exam questions and answers 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. - ANSWERS 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. - ANSWERS 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 - ANSWERS 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. - ANSWERS 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. - ANSWERS 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. - ANSWERS False T/F Given the same principal limit, a term payment plan will provide a larger monthly payment than a tenure payment plan. - ANSWERS 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. - ANSWERS a A borrower who needs a monthly payment for a short period of time and then wants to have the opportunity to borrow more in the future may want to choose which type of payment plan? a. Initial Lump Sum b. Modified Tenure c. Modified Term d. Tenure - ANSWERS c A "forward" mortgage is a type of loan in which: